TRANSMITTAL To: From: Municipal Facilities Committee

Transcription

1 TRANSMITTAL T: DATE COUNCIL FILE NO. Cuncil Frm: Municipal Facilities Cmmittee COUNCIL DISTRICT 14 At its meeting f Nvember 17, 2016, the Municipal Facilities Cmmittee adpted the recmmendatins f the attached Ecnmic Wrkfrce Develpment Department (EWDD) reprt, which is hereby transmitted fr Cuncil cnsideratin. Adptin f the reprt recmmendatins are cnsistent with the Cmmunity Redevelpment Agency f Ls Angeles (CRA/LA) Lng Range Prperty Management Plan fr the 10 Future Develpment Prperties and will authrize the City t submit a Dispsitin Plan and t prepare dcuments necessary t effectuate the dispsitin f the frmer CRA/LA prperty at 110 Suth Byle Avenue, per the dispsitin plan attached t the reprt. The prpsed purchase and sale is nt anticipated t have any immediate impact n the General Fund. As an Affected Taxing Entity under the Disslutin Statute, the City will receive int its General Fund a prtin f the sales prceeds as prperty tax incme upn the future sale f the prperty. The amunt f the unanticipated incme is unknwn at this time. MAS.BLM Miguel A. Santana City Administrative Officer Chair, Municipal Facilities Cmmittee

2 JAN PERRY GENERAL MANAGER CITY OF LOS ANGELES CALIFORNIA ECONOMIC AND WORKFORCE DEVELOPMENT DEPARTMENT 1200 W. 7 STREET Ls Angeles, CA ERIC GARCETTI MAYOR Nvember 14, 2016 Cuncil File: Cuncil District: 14 Cntact Persns & Phne Numbers: Sam Hughes: (213) Miguel A. Santana, City Administrative Officer Chair, Municipal Facilities Cmmittee Rm 1500, City Hail East COMMITTEE TRANSMITTAL: REQUEST APPROVAL TO SUBMIT A PROPOSED DISPOSITION PLAN TO THE CRA/LA, A DESIGNATED LOCAL AUTHORITY FOR PROPERTY LOCATED AT 110 SOUTH BOYLE AVENUE RECOMMENDATIONS That the City Cuncil: 1. AUTHORIZE the Mayr t submit a Dispsitin Plan fr 110 Suth Byle Avenue t CRA/LA fr review and apprval, as prvided here in substantia! frm as Attachment A; and That the City Cuncil, subject t the apprval f the Mayr: 1, 2, 3. DETERMINE that a sale f the City-ptined prperty at 110 Suth Byle Avenue t Buyer will assist in the ecnmic develpment f the City and that the public interest is best served by the direct sale f the prperty; INSTRUCT Cnflict Cunsel t prepare a Purchase and Sale Agreement and related dcuments t effectuate the City s purchase f the Prperty frm CRA/LA fr the fair market value as determined by the methds described within the Optin Agreement; INSTRUCT the City Attrney t prepare and present a Purchase and Sale Agreement, Grant Deed, Cvenant Agreement and Sale Ordinance t effectuate the City s sale f 110 Suth Byle Avenue t Buyer under the terms t be negtiated and fr the fair market value as determined by the methds described within the Optin Agreement;

3 Prpsed Dispsitin Plan 110 Suth Byle Avenue Page 2 f 5 Nvember 15, INSTRUCT the Ecnmic and Wrkfrce Develpment Department (EWDD) and the Ls Angeles Husing and Cmmunity Investment Department (HCiDLA) with the assistance f the Chief Legislative Analyst (CLA) and City Administrative Officer (CAO), t prepare any additinal dcuments necessary t effectuate the purchase and saie f 110 Suth Byle Avenue and implement the Dispsitin Plan; and 5. AUTHORIZE EWDD and HCiDLA t make technical crrectins r adjustments that may be required and are cnsistent with this actin, subject t the apprval f the CAO. SUMMARY in January 2015, the City entered int an Optin Agreement with CRA/LA - A Designated Lcal Authrity t purchase a parcel cnsisting f a vacant 14,000 square ft frmer parking lt at 110 Suth Byle Avenue (Prperty). The Prperty is currently wned by the CRA/LA - DLA, successr t the Cmmunity Redevelpment Agency f the City f Ls Angeles (CRA/LA), and Is categrized as a Future Develpment prperty in CRA/LA s Lng Range Prperty Management Plan. Thrugh the term f the Optin Agreement, the City has the right t acquire the Prperty fr the appraised Fair Market Value, as well as the right t slicit and sell the Prperty t a buyer that will use the Prperty cnsistent with the prvisins f the Redevelpment Plan, the Five Year Implementatin Plan, and the Cmmunity Plan fr the Prject Area. The recmmendatins in this reprt are fr the apprval f the Dispsitin Plan as required under the Optin Agreement, which includes a descriptin f a cnceptual scpe f develpment, an anticipated schedule f perfrmance, and evidence that the prpsed use f the prperty is cnsistent with the Redevelpment Plan, the Five Year Implementatin Pian, and the Cmmunity Plan fr the prject area. Future apprvals by Cuncil and Mayr will be required t authrize the executin f the transactinal dcuments and adptin f the sale rdinance. FISCAL IMPACT STATEMENT The prpsed actins regarding the purchase and sale f 110 Suth Byle Avenue have n impact n the general fund. As an Affected Taxing Entity under the Disslutin Statute, the City will receive int its General Fund a prtin f the sales prceeds as prperty tax incme upn the future sale f the prperty. The ptential amunt f prperty tax incme is unknwn at this time. BACKGROUND In March 2013, the Cuncil and Mayr requested that CRA/LA include the Prperty as a Future Develpment prperty n the CRA/LA Lng Range Prperty Management Plan (CF# ). By ding s and entering int an Optin Agreement fr the prperty, the City secured the pprtunity t ensure that the dispsitin f the Prperty wuld prvide nging cmmunity benefits, rather than being sld at auctin t the highest bidder, as therwise required in the State Disslutin statutes.

4 Prpsed Dispsitin Plan 110 Suth Byle Avenue Page 3 f 5 Nvember 15, 2016 Optin Agreement Requirements On December 8, 2014, Cuncil authrized the Mayr t execute the Optin Agreement fr 110 Suth Byle Avenue and authrized the Ecnmic and Wrkfrce Develpment Department (EWDD) t identify develpment pprtunities, slicit develpment prpsals, and t return t Cuncil with a prpsed Dispsitin Plan. Current Activities On May 11, 2016, EWDD released a Request fr Prpsals (RFP) fr the Prperty. The RFP was psted t the Ls Angeles Business Assistance Virtual Netwrk, the EWDD website, as well a private real estate develpment pprtunity website in an attempt t ensure the bradest utreach pssible. In respnse t the RFP, EWDD received a ttal f tw (2) prpsals which are currently under review. Once a develper has been selected, EWDD will enter int an Exclusive Negtiating Agreement (ENA) with the develper as a step twards exercising the City s ptin t acquire the Prperty. The ENA and any related cntractual agreements will include specific requirements t ensure that future develpment f the site will result in a prject that is cnsistent with the requirements f the Redevelpment Plan, the Five Year implementatin Plan, and the Cmmunity Plan fr the prject area, in additin t cmpliance with the Califrnia Envirnmental Quality Act (CEQA). The Optin Agreement requires the City t submit fr CRA/LA s apprval a Dispsitin Plan cntaining the infrmatin required fr CRA/LA t apprve the Plan, including: i. ii. ill. An anticipated schedule; A plan fr the develpment f the Prperty; and Evidence that the prpsed use is cnsistent with the Redevelpment Plan, the Five Year Implementatin Plan, and the Cmmunity Plan. Anticipated Schedule fr Acquisitin The City anticipates acquiring the prperty frm the CRA/LA and cnveying it t the Develper in a duble escrw int which the Develper wiil submit the purchase price and CRA/LA will submit the grant deed t cnvey the prperty. Althugh the City will be a party t the escrw and the transactin, the City will nt utilize any General Funds fr acquisitin nr receive any f the initial sale prceeds. Cnsistency with Applicable Plans As part f the ENA, acquisitin and future develpment f the site wuld cnfrm t the stated bjectives f the Adelante Eastside Redevelpment Prject - Redevelpment Plan. Applicable bjectives include but are nt limited t cntributing t CRA/LA s pian f cnstructing affrdable husing and increasing the supply and quality f cmmercial retail shpping pprtunities and prmting the retentin and develpment f a variety f cmmercial retail utlets in the Adelante Prject Area. Fair Market Value Optin Agreement Sectin 12 defines the methd t derive the Fair Market Value f the Prperty. Accrdingly, bth CRA/LA and the City engaged separate appraisal firms t estimate the fair market value f the Prperty supprted by an analysis f its highest and best use cnsistent with the Redevelpment Plan, Five Year Implementatin Pian, Cmmunity Plan, the physical cnditin f the prperty, and all matters f public recrd pertaining t the

5 Prpsed Dispsitin Plan 110 Suth Byle Avenue Page 4 f 5 Nvember 15, 2016 prperty. The Fair Market Value is determined by averaging the tw values if they are within 10%, r by hiring a third appraiser if the tw indicated values are mre than 10% apart. Sale fr Ecnmic Develpment Purpse In May 2016, the Cuncil and Mayr adpted the Asset Management Strategic Planning Framewrk fr the evaluatin f City prperties fr ecnmic develpment uses (Framewrk, CF # ). In the Framewrk, CRA/LA Future Develpment prperties are included as a separate categry f prperties, fr which EWDD, HCID and ther departments as necessary will manage slicitatin and dispsitin. Such prperties are nt subject t the Administrative Cde prvisins fr surplus prperties. The prpsed sale f the Prperty t the Buyer will further the gals f the Redevelpment Plan and serve the ecnmic develpment gals f the City by alleviating blight and prviding affrdable husing, an ecnmic develpment prgram and cmmunity-serving retail. The sale will be at Fair Market Value. Althugh sale prceeds will initially g t CRA/LA, the City as a taxing entity will receive apprximately 26% f the prceeds as future prperty tax receipts. Current and Future Cuncii/Mavr Actins Because f the circumstances related t redevelpment s disslutin in Ls Angeles, the Optin Agreement sets frth a series f actins and apprvals between the CRA/LA and the City, in which the parties agree upn the purchase price and the City exercises the ptin t acquire the prperly, and between the City and the Buyer, thrugh which the City sells the prperty t the Buyer and memrializes the cnditins f safe thrugh recrdatin f a cvenant. The actins currently prpsed will authrize the submissin f the Dispsitin Plan t CRA/LA, and direct cunsel t prepare the transactinal dcuments fr the City t acquire frm CRA/LA and sell t the Buyer. After apprval f the Dispsitin Plan by CRA/LA, a future reprt will request authrity frm Cuncil and Mayr t execute the transactinal dcuments between CRA/LA and the City, and between City and Buyer. The City will nt execute the purchase agreement frm CRA/LA unless and until the Buyer has executed the agreement t purchase the Prperty frm the City. Envirnmental Review The recmmended actin (Review and Apprval f a Dispsitin Plan) is statutrily exempt frm prvisins f the Califrnia Envirnmental Quality Act (CEQA), pursuant t Sectin (Feasibility and Planning Studies) f the State CEQA Guidelines. Further, pursuant t Sectin 15004(b) (2) (A) f the State CEQA Guidelines, future use f the prperty wuld be subject t envirnmental review cmpliance pursuant t CEQA and CRA/LA apprval f the future prject. City Attrney and Cnflict Cunsel The Office f the City Attrney, due t its previus rle as legai cunsel t the frmer Cmmunity Redevelpment Agency, currently has a cnflict n many matters cncerning the frmer CRA/LA and its disslutin. Accrdingly, the City, under the crdinatin f the Mayr s Office, has engaged Richards, Watsn & Gershn as cnflict cunsel fr matters in which City Attrney has a cnflict. Fr Future Develpment prperties including 110 Suth Byle Avenue, cnflict cunsel will advise the City n the transactins between the City and

6 Prpsed Dispsitin Pian 110 Suth Byle Avenue D age 5 f 5 Nvember 15, 2016 CRA/LA. City Attrney will advise the City n issues related t the City s sale f the Prperty t the Buyer. $7 C JAN PERRY General Manager JP:SH I Attachment A: Prpsed Dispsitin Plan fr 110 Suth Byle Avenue

7 ATTACHMENT A CITY OF LOS ANGELES 1st and Byle PROPOSED DISPOSITION PLAN 110 Suth Byie Avenue Ls Angeles, Califrnia OPTION AGREEMENT CRA/LA, A Designated Lcal Authrity and the City f Ls Angeles Nvember 17, 2016 City Cntract C

8 ATTACHMENT A DISPOSITION PLAN ist AND BOYLE TABLE OF CONTENTS 1. EXECUTIVE SUMMARY 11 Plan Objective 1.2 Prperty Overview DISPOSITION PLAN 2.1 Mixed-Use Prject ANTICIPATED SCHEDULE 3.1 Prject Timeline COMPLIANCE WITH REDEVELOPMENT AND CITY PLANS 4.1 Adelante Eastside Redevelpment Prject - Redevelpment Plan 4.2 Adelante Eastside Redevelpment Prject - Five-Year Implementatin Plan 4.3 Byle Heights Cmmunity Plan

9 ATTACHMENT A 1. EXECUTIVE SUMMARY 1.1 Plan Objective The City f Ls Angeles Ecnmic and Wrkfrce Develpment Department (EWDD) has prepared this Dispsitin Plan t be in accrdance with the Optin Agreement frm City Cntract C with regards t the prperty at 110 Suth. Byle Avenue., Ls Angeles, CA. The bjective f the Dispsitin Plan is t address and expund upn the requirements set frth in Sectin 6A f the afrementined Agreement: An anticipated schedule fr the date f the city s prpsed acquisitin f the Prperty frm CRA/LA; A detailed plan fr the develpment f the Prperty; and Evidence that the prpsed use f the Prperty is cnsistent with the Redevelpment Plan, the Five Year Implementatin Plan, and the Cmmunity Plan. The Redevelpment and City Plans referenced in this Dispsitin Plan can be fund nline as fllws: 1.2 Adelante Eastside Redevelpment Prject - Redevelpment Plan Adelante Eastside Redevelpment Prject - Five -Year Implementatin Plan Bvle Heights Cmmunity Plan Prperty Overview An verview f the parcel and histry f the Site is necessary t prvide cntext fr the Dispsitin Plan. The Site is generally bunded by East 1st Street n the nrth, Suth Byle Avenue n the west, residences n the suth, and an alley n the east. It cnsists f a single 14,600 square ft parcel (APN ). The develpment prpsal aims t transfrm the prperty frm a vacant lt t a cmmunity serving Mixed-Use Site. The Prperty is currently maintained by the City f Ls Angeles Bard f Public Wrks Office f Cmmunity Beautificatin, and is situated at 110 Suth Byle Avenue., Ls Angeles, CA Ntable attractins in the immediate vicinity include the Mariachi Plaza and newly renvated Byle Htel. It is within ne blck f lcal Bus Lines, the Metr Gld Line Subway Statin, and varius small businesses. Within walking distance are a number f ppular cafes and restaurants. The bjective f the prpsed develpment is t cmplement Byle Heights' histric sites and nging prjects with a design reflective f the culture celebrated at Mariachi Plaza. 2. DISPOSITION PLAN 2.1 Mixed-Use Develpment The anticipated develpment plan is a mixed-use prject that wuld include affrdable husing and cmmercial retail. The anticipated future prject will be develped by a develpment team that has evidence apprpriate ability t cmplete the mixed-use develpment. As part f an Exclusive Negtiatin Agreement (ENA), details f the future prject shall be established. Key prject features that shall be wrked ut in alignment with the intended uses f the Opprtunity Site include the fllwing: Ist AND BOYLE j 1

10 ATTACHMENT A «cmmercial retail satisfactry parking «affrdable husing units and type ANTICIPATED SCHEDULE Prject Timeline The City hlds the Optin Agreement with the CRA/LA fr the Site and will engage in the prcess f btaining the prperty in rder t ensure the viability f any prpsal. The Optin Agreement requires the City t pay Fair Market Value t the CRA/LA at the time f acting n the Optin. Develper Schedule n Next Page 1st AND BOYLE j 2

11 ATTACHMENT A DEVELOPMENT SCHEDULE: ACQUISITION OF OPTION PARCEL 1ST AND BOYLE MILESTONES SCHEDULE SELECTION OF PROJECT DEVELOPMENT TEAM NEGOTIATE MAJOR DEAL POINTS, INCLUDING.EXCLUSIVE NEGOTIATING AGREEMENT (ENA) IF APPROPRIATE Onging Onging Determine prject scpe and majr deal pints Selected develper t initiate entitlement and CEQA actins, as required City prepares Dispsitin Plan fr submissin t CRA/LA APPRAISALS Under Review City and CRA/LA agreement n Jint Appraisal Instructins and cmmencement f Full Market Value (FMV) appraisals Cmpletin f appraisals and agreement n FMV Purchase Price (including third appraisal if required) COUNCIL/PfAYORAL ACTIONS (1)» Apprve Majr Deal Pints/ENA with Develper (t be subject t future CEQA dcumentatin/determinatin as required) Instruct City Attrney t draft Develpment Agreement (DA), and City-Develper Sale Ordinance Authrize Mayr t submit Dispsitin Plan t CRA/LA PROJECT DISPOSITION PLAN» days City submits Dispsitin Plan t CRA/LA CRA/LA review and apprval f Dispsitin Plan by Gverning Bard and Oversight Bard Initiate preparatin f City-CRA/LA Purchase Agreement (by Cnflict Cunsel Richards Watsn Gershn) COUNCIL/MAYORAL ACTIONS (2)» 30 days, assuming referral nly t Ecnmic Develpment Cmmittee 45 days Authrize executin f City-CRA/LA Purchase Agreement (PA) t acquire CRA/LA parcel(s) Authrize executin f City-Develper DA (subject t cmpletin f CEQA) Authrize. Mayr t execute Optin and submit acquisitin dcuments t CRA/LA NOTE: if CEQA review is cmpleted, Cuncil culd take the actins shwn at Cuncil/Mayral Actins 3, belw, at this time, including CEQA Determinatin and adptin f the City-Develper Sale Ordinance PREPARATION OF CEQA ANALYSIS AND REPORTS, AS REQUIRED 4. COMPLIACE WITH PRE-EXISTING PLANS Adelante Eastside Redevelpment Prject - Redevelpment Pian The prpsed prject is cnsistent with the prvisins f the Adelante Eastside Redevelpment Prject - Redevelpment Plan as fllws: It is cnsistent with the relevant Prject Objectives f Sectin 106: Ist AND BOYLE j 3

12 ATTACHMENT A 1. "Imprve the quality f life fr thse wh live and wrk in and visit the Prject Area thrugh enhanced business, emplyment, husing, shpping, entertainment, recreatinal, and educatinal pprtunities. The prpsed develpment imprves the quality f life in the Prject area thrugh affrdable husing and retail. 2. "Prmte the eliminatin and preventin f the spread f blight and deteriratin, and prmte the cnservatin, rehabilitatin, renewal and redevelpment f the Prject Area. While currently an empty lt that has had issues with illegal dumping, the prspective develpment aims t cunter-act deteriratin by prviding mixed-use develpment t the Site. 3. "Encurage the invlvement and participatin f residents, business wners, prperty wners and cmmunity rganizatins frm the Prject Area in the redevelpment f the Prject Area". The final develpment will cnsider cncerns f residents f the immediate area. 4. Preserve and increase emplyment, training, business and investment pprtunities thrugh redevelpment prgrams, and t the greatest extent feasible, prmte these pprtunities fr residents wh reside in r adjacent t the Prject Area and fr businesses that are lcated in the Prject Area. The prpsed develpment intends t aid the Prject Area thrugh the creatin f jbs related t retail. 8. Prmte and encurage the develpment f facilities fr cmmunity services such as libraries, plice statins, and health and human services prgrams t meet the needs f thse wh live and wrk in the Prject Area. The prpsed develpment includes preliminary uses and services that are aligned with feedback received frm the cmmunity. 14. "Prmte the develpment f sund residential neighbrhds thrugh mechanisms such as... sensitive mixed-use and in-fill husing rehabilitatin and develpment..." Cnsisting f affrdable husing and retail, the prpsed mixed-use urban infill develpment is sensitive t the unique urban fabric f the prject area. 15. "Minimize the prliferatin f businesses that have a detrimental effect n the cmmunity, such as liqur stres, bars, adult riented businesses ther similar uses. The prpsed develpment des nt include any such businesses. 4.2 Adelante Eastside Redevelpment Prject - Five -Year implementatin Plan The prpsed prject is cnsistent with the prvisins f the Adelante Eastside Redevelpment Prject - FiveYear Implementatin Plan as fllws: It is cnsistent with the relevant gals f Sectin 1-A: Increase the supply and imprve the quality f cmmercial retail shpping pprtunities and prmte the retentin and develpment f a variety f cmmercial retail and entertainment utlets Ist AND BOYLE 4

13 ATTACHMENTA A variety f uses are being cnsidered fr the retail cmpnent f the ptential develpment. It is cnsistent with the CRA s affrdable husing bjective f Sectin IV-A-1-a: The CRA/LA will cntinue utilizing husing set-aside revenues generated frm the Adelante Prject Area and ther husing develpment and rehabilitatin funding surces t preserve, imprve r cnstruct affrdable husing fr residents bth within and adjacent t the Adelante Prject Area.. With an emphasis n affrdable husing, the prspective Buyer aims t cntribute t CRA/LA s plan f cnstructing affrdable husing in the Adelante Prject Area. 4.3 BySe Heights Cmmunity Pian The prpsed prject is cnsistent with the prvisins f the Byle Heights Cmmunity Plan as fllws: It is cnsistent with the relevant prvisins f the Purpse f the Cmmunity Plan sectin. Planning the remaining cmmercial and industrial develpment pprtunity sites fr needed jb-prducing uses that imprve the ecnmic and physical cnditin f the Byle Heights cmmunity." The ptential mixed-use develpment includes retail, which is a jb prducing use that aspires t imprve the ecnmic and physical cnditin f the cmmunity. It addresses the relevant issues cntained in the Cmmunity Issues and Opprtunities sectin. Need t prvide mre affrdable husing. The husing cmpnent f the ptential develpment has an emphasis n affrdable husing. Lack f cnvenient shpping services in prtins f the cmmunity. In clse prximity t the Metr Gld Line Subway Statin, Byle Htel, and Santa Cecilia Apartments (mve-in date late 2016), the prject aims t prvide retail t a prminent cmer f an evlving cmmercial and residential neighbrhd. Inadequate parking fr cmmercial businesses. The ptential develpment is t include parking. It is cnsistent with the relevant prvisins f the Neighbrhd Character sectin. Preserve the cntinuity f the streetscape and enhance cmmunity identity. The prspective develpment intends t enhance cmmunity identity with a design reflective f the culture celebrated at Mariachi Plaza. 1st AND BOYLE 5