Meeting_Body
PLANNING AND PROGRAMMING COMMITTEE
JULY 14, 2021
Subject
SUBJECT: VERMONT/SANTA MONICA JOINT DEVELOPMENT PROJECT
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZING the Chief Executive Officer (CEO) to execute an amendment to the Purchase and Sale Agreement with SMV Housing, L.P., an affiliate of LTSC Community Development Corporation (LTSC) to amend the purchase price of approximately 33,682 square feet of real property (Metro Property) adjacent to the Vermont/Santa Monica B (Red) Line Station from $7,140,000 to $5,100,000, subject to Federal Transit Administration (FTA) concurrence.
Issue
ISSUE
Metro and SMV Housing, L.P. (Developer), an affiliate of LTSC Community Development Corporation (LTSC), are currently parties to a Purchase and Sale Agreement (PSA) which allows the Developer to purchase from Metro approximately 33,682 square feet of real property (Metro Property) next to the Vermont/Santa Monica B (Red) Line Station to facilitate the construction and operation of a mixed-use, affordable housing project (Project) on the Metro Property and adjacent Developer-owned property. In August 2020, the Metro Board of Directors (Board) approved the PSA terms including a 30% discount ($3,060,000) from fair market value (FMV) for the Metro Property. The Developer must lower the Project's total development costs (TDC) in order to be competitive for Low Income Housing Tax Credits and tax-exempt bonds, the final funding sources needed to begin construction. The Developer has reduced Project costs but the TDC remains over the threshold to be competitive for these critical funding sources. The Developer has requested an additional discount of 20% from FMV for the Metro Property (total discount of 50% or $5,100,000 from FMV). Reducing the purchase price for the Metro Property would improve the Project's competitiveness for funding. Without the requested Board action, the Developer will be at an impasse in its affordab...
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