Meeting_Body
PLANNING AND PROGRAMMING COMMITTEE
JUNE 16, 2021
Subject
SUBJECT: 1ST & LORENA JOINT DEVELOPMENT
Action
ACTION: APPROVE RECOMMENDATION
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO) to execute an amendment to the Joint Development Agreement (JDA) with A Community of Friends (Developer) and fund $1,460,037 into an escrow account to be repaid by the Developer at construction closing in order to facilitate the reabandonment of an oil well on Metro-owned property at the northeast corner of 1st and Lorena Streets in Boyle Heights (Site).
Issue
ISSUE
In April 2021, the Developer learned that it cannot secure a building permit for its affordable housing project from the City of Los Angeles until the oil well on the Site is reabandoned to current regulatory standards, which was originally contemplated to occur during the ground lease term. Both obtaining the building permit and securing all funding to construct the affordable housing project are conditions to the closing of the ground lease under which the Developer will construct its project. Since Metro has not granted the Developer the right to access and develop the Site, the Developer is unable to secure financing to cover the estimated $1,460,037 cost to reabandon the well.
Staff is seeking authorization to amend the Joint Development Agreement (JDA) so that Metro can advance the $1,460,037 into an escrow account that the Developer will draw from to pay for the cost of the oil well reabandonment. The JDA amendment will require the Developer to repay Metro for any use of the $1,460,037 when the ground lease closing occurs. The JDA amendment will be accompanied by a license agreement granting site access to perform the reabandonment. Without the requested Board action, the Developer will be at an impasse in its affordable housing development.
Background
BACKGROUND
Site and Project Overview
The Site is an approximately 0.8-acre portion of the approximately...
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