CRA/LA, A DESIGNATED LOCAL AUTHORITY (Successor Agency to the Community Redevelopment Agency of the City of Los Angeles, CA) M E M O R A N D U M

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1 CRA/LA, A DESIGNATED LOCAL AUTHORITY (Successor Agency to the Community Redevelopment Agency of the City of Los Angeles, CA) M E M O R A N D U M DATE: MARCH 15, 2012 C TO: GOVERNING BOARD EOPS # FROM: STAFF: CHRISTINE ESSEL, CHIEF EXECUTIVE OFFICER JENNY SCANLIN, REGIONAL ADMINISTRATOR JOSH ROHMER, ACTING PROJECT MANAGER JASON NEVILLE, ACTING ASSISTANT PROJECT MANAGER SUBJECT: 29 th Street Crossings Reciprocal Easement. Consent to Reciprocal Easement Agreement (REA) and Subordination of CRA/LA Loans to REA for Phases A1 and A2 of the UHC 29 th Street Crossings affordable housing project located at 814 East 29 th Street in the Council District Nine Corridors South of the Santa Monica Freeway Recovery Redevelopment Project Area DOWNTOWN REGION (CD 9) RECOMMENDATION(S) That the Governing Board take the following actions: 1. Consent to a Reciprocal Easement Agreement ( REA ) between UHC Los Angeles, LP and UHC 29 LA, LP to allow the shared use of open space facilities and ten (10) parking spaces by residents of 29 th Street Crossings Phases A1 and A2; and 2. Authorize the Chief Executive Officer (or designee) to execute a Subordination Agreement(s) with UHC Los Angeles, LP ( UHC 14 ) and UHC 29 LA, LP ( UHC 29 ) to subordinate CRA/LA s Deeds of Trust to the REA on Phases A1 and A2. SUMMARY These actions will allow residents of the recently-completed 29 th Street Crossings (Phase A1) affordable housing project to use a parking lot directly adjacent, which is owned by a separate legal entity and is part of the project s Phase A2. The owners of the two adjacent sites will enter into a Reciprocal Easement Agreement ( REA ) to allow residents of Phase A1 to use the ten (10) spaces on a portion of the Phase A2 site. In exchange for use of Phase A2 s parking spaces, owners of Phase A1 will permit future residents of Phase A2 to use the Community Center and open space located at Phase A1. 29 th Street Crossings is a multi-phase affordable housing project developed by Urban Housing Communities. The Project was originally conceived as a single project to be financed and constructed at one time. However, acquisition of the entire site proved a challenge, which required a phased approach to acquisition. CRA/LA provided a $3,000,000 loan for Phase A1, secured by a Deed of Trust. Phase A1 was completed in January 2012 and is owned by UHC 29 LA, LP ( UHC 29 ).

2 29 th STREET CROSSINGS R.E.A. SUBORDINATION AGREEMENT PAGE 2 CRA/LA also provided a $500,000 loan secured by a Deed of Trust for Phase A2, which is in the financing stage of development and is owned by UHC Los Angeles LP ( UHC 14 ). This Deed of Trust will be subordinated to the REA so that, in the event of a default, the REA will not be affected and neither Phase 1 or Phase 2 rights to the parking spaces and open space will be jeopardized. The proposed REA will allow Phases A1 and A2 to comply with the required amount of parking and open space per Los Angeles Municipal Code and CRA/LA Housing Design Guidelines. A portion of the Phase A2 site, Lot 258, is a ten-space surface parking lot for use by residents of both Phases A1 and A2. The additional parking is required for Phase A1 s entitlements, just as the community facilities and open space are required for Phase A2 s entitlements. This arrangement will be recorded against the properties in a Reciprocal Easement Agreement to which the CRA/LA Deeds of Trust on Phases A1 and A2 will be subordinate. PREVIOUS ACTIONS February 5, CRA/LA Board of Commissioners Consideration of Environmental effects of the Project and restructuring of an existing $3,500,000 acquisition and predevelopment loan with Urban Housing Communities, LLC for a two-phase affordable housing development located at East 29th Street and 2901 South Griffith Avenue (CF ) March 15, CRA/LA Board of Commissioners Authorization to execute an acquisition and predevelopment loan agreement with UHC LA 29 LP. (CF ) DISCUSSION & BACKGROUND Location Phase A1 is located at E. 29 th Street in the City and County of Los Angeles. Phase A2 is located at E. 29 th Street in the City and County of Los Angeles Developer Entity UHC 29 Los Angeles, LP and UHC 14 Los Angeles LP are limited partnerships in which Urban Housing Communities LLC, a for-profit affordable housing developer that specializes in multifamily and senior housing facilities in the State of California is the co-general partner and WCH Affordable I, LLC is the nonprofit managing general partner, with Western Community Housing Inc., a nonprofit, as the sole member and manger. Urban Housing Communities LLC was formed in 2003 by key executives of ASL Housing, AIG SunAmerica and with collective development experience of approximately 10,000 housing units in California and Hawaii. Presently, Urban Housing Communities has seven projects under construction in California and two additional projects in Hawaii. Description, Project Context and Project History 29 th Street Crossings is a multiphase affordable housing project located at E. 29th Street in the CD9 Project Area. 29th Street Crossings Phase A-1, A-2 and B are part of a larger effort to address safety and environmental justice issues in this community by transitioning this block from industrial to residential uses as permitted under the redevelopment plan and as envisioned in the current update to the City s Southeast Los Angeles Community Plan.

3 29 th STREET CROSSINGS R.E.A. SUBORDINATION AGREEMENT PAGE 3 Phase A1 was recently completed, including 34 units of affordable housing, a community center, and open space with a playground. The site is 1.12 acres and was a former industrial property. The CRA/LA provided a permanent loan of $3 million for Phase A1. The full amount of the CRA/LA loan for Phase A1 has been disbursed. Phase A2 is on a smaller 0.38 acre site; most of the previous improvements have been demolished and the site is cleared. The developer is still assembling financing for this project. This phase is anticipated to include 29 affordable housing units and small amount of industrial uses. The CRA/LA provided an acquisition and predevelopment loan of $500,000 for Phase A2. The full amount of the CRA/LA loan for Phase A2 has been disbursed. A CALReUSE grant from the California Pollution Control Financing Authority was awarded to assist in the complicated and expensive task of remediating the properties to residential standard. The surrounding neighborhood is currently comprised of a mix of uses, including a public elementary school, single family, and multi-family residences, adjacent to industrial uses such as the Palace Plating metal plating shop, closed by court order in December Enforceable Obligation [EOPS #1004] The UHC 14 and UHC 29 loan agreements are currently included as one item #1004 on EOPS. This entry will be revised in the future to include two separate EOPS line items for the two discrete loan agreements. SOURCE OF FUNDS No CRA/LA funds are required for this action. ROPS AND ADMINISTRATIVE BUDGET IMPACT The recommended actions to consent to the REA and authorize subordination of the CRA/LA loans to the REA does not require the use or obligation of any additional tax increment funds and are allowable types of actions to be taken by the Governing Board. ENVIRONMENTAL REVIEW The City of Los Angeles was the lead agency for the Project for purposes of CEQA. On February 14, 2008, the City of Los Angeles, acting through its Planning Department approved the project and adopted a Mitigated Negative Declaration (MND). The CRA/LA s responsibility, as a Responsible Agency under CEQA, is to consider environmental effects of the Project as shown in the MND prepared by the lead agency prior to acting on the Project. On February 5, 2009, the CRA/LA Board of Commissioners adopted a Resolution certifying that it had reviewed and considered the environmental effects of the project as shown in the City of Los Angeles Mitigated Negative Declaration (ENV MND-REC1 ENV MND-REC1 - MND ) pursuant to California Environmental Quality Act ( CEQA ) Guidelines set forth in California Code of Regulations Section 15096(f). Review of the proposed project by CRA/LA staff indicates that no new significant effects that had not already been addressed in the adopted MND would occur, and that there have been no changes to the proposed project, nor circumstances under which the proposed project would be undertaken. Therefore, no further environmental review is required.

4 29 th STREET CROSSINGS R.E.A. SUBORDINATION AGREEMENT PAGE 4 The consent to the REA for the existing parking spaces and execution of the Subordination Agreement do not constitute a project as defined by the California Environmental Quality Act (CEQA). Christine Essel Chief Executive Officer By: David Riccitiello Chief Operating Officer There is no conflict of interest known to me which exists with regard to any CRA/LA officer or employee concerning this action. Attachment A Site Plan and Phases

5 ATTACHMENT A: Site Plan and Phases Portion of Phase A2 to contain shared parking per REA Phase B: $3.75 million Acquisition and Predevelopment Loan approved March 2011, not executed Phase C: Acquisition and Predevelopment Loan anticipated Original Phase A: $3.5 million Acquisition and Predevelopment Loan executed 2007, Amended 2009 Replaced by Phase A1 ($3m) and A2 ($.5m) loans Phase A1 (UHC LA 29): $3.0 million permanent loan executed August 2010 (from original Phase A loan) Completed January 2012 Phase A2 (UHC 14 LA): $.5 million Acquisition and Predevelopment loan executed August 2012 (from original Phase A loan) Amendment to increase to $1.1 approved March 2011, not executed Last parcel to be acquired Spring 2012