PURPOSE

The purpose of this memorandum is to provide information to the Burbank Redevelopment Agency Board (Agency) and City Council (Council) to consider a Disposition and Development Agreement (DDA) (Exhibit A) between the Agency and the Burbank Housing Corporation (Nonprofit).  The proposed DDA conveys via a lease ten Agency-owned residential buildings located at 1801, 1807, 1811, 1813 and

BACKGROUND

The Peyton-Grismer neighborhood has been considered for a number of years as one of several blighted neighborhoods within Burbank characterized by individual buildings suffering from deferred maintenance and fluctuating rates of criminal activity.  Historically, this neighborhood has been on the Police Department�s �top three areas for calls received.�  In addition, past conversations with officials from the Burbank Unified School District (BUSD) have indicated that students from this area tended not to be as engaged as the general school population.    We can speculate that the socio-economic challenges and living environment puts stress on the entire family.

This project is one predicated upon a proven strategy for upgrading a neighborhood in decline.   As with the Elmwood neighborhood, the approach is to acquire and rehabilitate several key distressed properties affecting the immediate neighborhood, have the Nonprofit operate the site as a mixed income project with an affordability component and to construct an activity center from which to provide services that will help to integrate tenants into the community.

Tonight�s action is to consider a DDA that will implement the aforementioned strategy in the Peyton-Grismer focus neighborhood.  Under the DDA, the Nonprofit will mitigate the following identified problems that blight the Property:

   q       All of the buildings are considered �substantially deteriorated�;

   q       Parking is well below current code requirements for an R-4 zone;

   q       The poor layout of building footprints, exacerbated by the poor placement of parking and configuration of vehicular    access, create a dangerous condition in the event that emergency services are required;

   q       The area lacks adequate recreation space; and

   q       Bedroom sizes do not correspond to a need identified in our housing needs assessment for family units affordable to  very low and larger, lower income households.[1]

This project also fulfills several housing objectives and programs adopted by the Agency Board and City Council as recommended by the Blue Ribbon Task Force on Affordable Housing and as later reiterated at the July 2003 study session on an affordable housing strategy.  To summarize, the housing strategy included these objectives and programs:

   q       Objective:      Create Community In Conjunction With Housing

        Program: Integrate community-serving uses with housing development

Whenever possible, the Agency is to incorporate community-serving uses within new and existing residential developments to address the needs of the larger neighborhood.  To meet this objective, the Agency intends to construct an activity center into the Peyton-Grismer project and to work with the Burbank Housing Corporation, City Parks and Recreation Department and local nonprofit agencies to incorporate services in the future. 

The Nonprofit intends to involve residents in program development at the future activity center.   At the same time, the Nonprofit plans to import the general goals of the Elmwood Achievement Center:

  �      To provide a safe environment for children to participate in after-school tasks in a community setting.

  �      To provide linkages to existing services in the community.

  �      To involve parents and provide them with the resources to enable their children�s� successful interaction with school and  community and to give parents the opportunity to assess the needs of Property residents and to fashion programs tailored to residents in this focus neighborhood. 

   q       Objective: Sustain and Strengthen Neighborhoods

        Program:  Continue acquisition/rehabilitation activities in focus neighborhoods

The Agency has initiated steps to increase funding to the Burbank Housing Corporation to support its ongoing actions to acquire and rehabilitate properties in focus neighborhoods.  Since its inception in 1997, the Burbank Housing Corporation has assembled 110 units that will increase to 180 units with the acquisition of the pending Peyton-Grismer project.

As mentioned, the Property is proposed to be developed by the Nonprofit through a DDA.   An overview of the Nonprofit is referenced in the attached Exhibit E that includes its composition, financing and Agency controls, as well as current projects.

Based on a preliminary review of the exterior of the buildings within the study area[2], it was evident that several properties were inadequately maintained.   An even greater concern, however, was the lack of adequate vehicular circulation between buildings in several cases creating health and safety hazards.  Consequently, the architectural firm of Meyer & Allen Associates (Consultant) was retained to assess building conditions and building configurations, as well as parking capacity and vehicular/pedestrian circulation.   The Consultant�s analysis of the Peyton-Grismer neighborhood, provided to the Agency on November 14, 2002, set forth these fundamental findings:

�      While probably structurally sound, approximately 75 percent of the total gross building area (16 of 21 buildings included in the study area) is �substantially deteriorated�.

  �      Parking is significantly substandard, with a ratio of approximately one space per unit and is well below current code requirements for an R-4 zone (1.75 spaces per one-bedroom unit and 2.0 spaces per two-bedroom unit plus 1 space per 5 units for guest parking).  Overcrowded occupancies further affect the demand for parking.

  �      The layout of the buildings, the location of parking and the configuration of the vehicular access points to buildings and parking areas is contorted and confusing, creating a dangerous condition in the event that emergency services are required within the larger parcels. 

  �      There is very little usable recreation space available to the tenants.  Except for several swimming pool areas (which are not maintained, and contain stagnant water), most of the outdoor spaces are paved for parking and driveway use.

The Agency initially considered the feasibility of assembling all properties in the study area but concluded the cost was prohibitive.[3]  Consequently, the Agency directed its attention to the two most troublesome properties in the area: (1) a portion of a 2.4 acre �larger parcel"[4] at 1801�1815 Grismer Avenue, improved with five garden style apartments containing 84 rental units (72 one-bedrooms, 11 two-bedrooms and one three-bedroom), representing approximately 45 percent of all units and over one-half of the land area comprising the study area; and (2) a 19,100 square foot property at 1729-1735 Elliott Drive comprised of three parcels improved with five buildings.  In addition, the Agency acquired a third property at 1819 Grismer Avenue previously improved with three residential units, which has since been cleared for the future site of the Peyton-Grismer Activity Center and an adjoining tot lot/recreation area.

After protracted and unsuccessful negotiations with the owners of 1801-1815 Grismer Avenue and 1729-1735 Elliott Drive, the Agency undertook separate eminent domain actions required to assemble the Property.  Prolonged deferred maintenance is evident at both sites, but under current favorable market conditions, neither owner was motivated to sell or to invest funds to upgrade his property. 

Subsequent to the Agency initiating condemnation action against the owner of 1801-1815 Grismer Avenue, the Agency and owner reached a stipulated judgment for the disposition of the property to the Agency for $7.4 million.  Condemnation counsel anticipates having pre-judgment possession for the Agency following tonight�s action. The owner is to retain 1725 Grismer Avenue and the lot line of 1725 Grismer Avenue is to be adjusted (adding 14,030 square feet), increasing the site to 28,400 square feet to ensure that, when severed from the larger parcel (1801-1815 Grismer Avenue), the site is legally conforming and meets current parking standards.

Following delivery of a Notice of Intent to the owner and a public hearing on October 1, 2002 to consider acquisition of 1729-1735 Elliott Drive, the Agency adopted a Resolution of Necessity against the owner, the first step in the condemnation process.  Legal counsel worked with the property owner�s attorney to have an appraisal completed, including a walk through to the properties.  The appraisal was completed and an Order of Immediate Possession (OIP) was filed with the Court on September 2, 2003.  Possession of the site will occur at the end of 90 days from the OIP filing date or earlier if agreed to by the owner.

COMMUNITY OUTREACH

Agency and Nonprofit staff have outreached to tenants from the Property and to residents from the surrounding neighborhood to apprise them of the Agency�s efforts to assemble and develop the Property.   On June 4, 2002, a meeting with tenants was conducted at Washington School, the venue of all subsequent meetings, during which the proposed revitalization plan was introduced after which a meeting summary was mailed to all residents.  Two meetings were later held on July 2, 2002 followed by a mailer to tenants summarizing tenant questions raised during the meeting and staff responses. On July 11, 2002, a meeting with residents in the surrounding neighborhood was also held to update them on the Agency�s revitalization plan.    Staff conducted meetings with residents on March 25, 2003 to advise tenants of property inspections that took place in mid-April and again on July 10, 2003, to give them the latest information.  Throughout this one-year period, staff also has notified tenants of pending Property replacement and relocation plans, set-up a web page to further provide Property information on the City web site, met with a condominium association adjacent to the Property and routinely responded to telephone inquiries from Property residents and neighbors.   To date, six community meetings have been held (with an upcoming neighborhood social event planned for September 27, 2003) in a continuing effort to develop and maintain a rapport with both Property and neighborhood residents.

In addition, contact with Property tenants has occurred as part of the development process.  The Agency�s relocation consultant, Overland, Pacific, Cutler, Inc, continues to meet and work closely with tenants, both those to be displaced and those to remain, and has cultivated a rapport with them.  During the inspection of the Property, Nonprofit and Agency staff spoke with many tenants, many who continued previous conversations begun with staff at the aforementioned tenant meetings.         

Tenants have asked several recurring questions at these different gatherings that principally concern relocation and future property management:

  �      What are my benefits and may I return if displaced?

  �      What will be my new rents and can the rents be rolled back?

  �      What is the Nonprofit�s pet policy?

  �      What will happen to the garages rented for storage?

Most residents are eager for the Agency and Nonprofit to take possession of the Property and stabilize rents in the face of several recent rounds of rent hikes.  

ANALYSIS

The Agency proposes to advance $13.12 million in Low and Moderate-Income (LMI) funds comprised of two components:

q       The Agency funds all land assemblage costs. The estimated cost to the Agency for its land assemblage is $9.674 million (assemblage costs are anticipated to increase marginally subject to the settlement cost for 1729-1735 Elliott Drive).

q       The Agency extends $3.441 million in rehabilitation financing to the Nonprofit.  This expenditure will be partially repaid when the Nonprofit takes out a permanent loan at the time of Property stabilization.  A residual receipts note with a 55-year repayment term will repay the gap between the amount of rehabilitation costs and the amount of a conventional loan obtained for by the Nonprofit. 

Estimated Agency Costs

Land Acquisition Costs[5]                   $          8,790,000

Demolition Costs                                  $               40,000

Agency Loan                                          $          3,441,000

Agency Soft Costs                                 $             207,000

Relocation Costs                                   $            637,000

Total Costs                                             $       13,115,000

There are several reasons why the cost for the project has reached this level.  Particularly costly has been the effect of the Agency acquiring buildings by condemnation action during the height of an upturn in property values.  In addition, the scope of development for Peyton-Grismer is ambitious, involving reconstruction of units to increase bedroom sizes, demolition of 26 units (plus three units demolished at 1819 Grismer Avenue) replacing roofs or upgrading building systems and constructing a new multi-story activity center.  In short, the additional Agency costs represent an investment in the community by helping backfill some very basic needs of this immediate neighborhood such as units with additional bedrooms, and the activity center to serve the families.   In addition, the Agency�s cost is increased by restricting rents on 33 units.

Agency funds are to be partially repaid from by an Agency lease, a private loan and an Agency loan.  In order of priority for a call on funds:

1.      Once the Property stabilizes (completion of rehabilitation), the Nonprofit is to secure a permanent loan from a commercial bank to partially repay the Agency�s $3.441 million rehabilitation loan.  The lender�s security will have priority over the Agency�s lease and loan.

            1. Example:

Agency�s Rehabilitation Loan                                                  $3.441 million

Less: Funds from Conventional Loan                                    $2.322 million

Balance paid through residual receipts                                  $1.119 million

2.      The Nonprofit leases the Property at one dollar per year until the Agency residual receipts loan is repaid, after which the lease is 100 percent of the residual receipts from the Property.  

3.      The balance of the Agency loan is repaid from 100 percent of the Property�s residual receipts after operating expenses and permanent loan debt service payments.  

Example:                                   2. Agency Loan            3. Agency Loan

                                                                        Payment                        Retired

Nonprofit�s rental income                                $630,000                    $630,000

Less: annualized conventional Loan              $200,000                     $200,000

Less: operating expenses                              $400,000                     $400,000

Less: Agency loan                                         $  30,000                            0

            Less: Agency lease                            $1                                 $30,001          

The Agency�s financial consultant, KMA, has projected the net Agency cost based upon the foregoing costs/revenue discussion:

DISPOSITION AND DEVELOPMENT AGREEMENT (�DDA�)

The DDA is a joint agreement between the Agency, City and BHC that describes the terms and conditions for the disposition (via a lease) of the Agency�s properties to the Nonprofit and the rehabilitation and operation of the Property.  The DDA provides for financial assistance lent from Agency Low and Moderate-Income (LMI) funds, establishes the conditions for disbursement of the LMI loan and sets forth the requirements for the operation of the Property.  Summarized below are the salient provisions of the proposed DDA.

q     DEVELOPER RESPONSIBILITIES

�      The Nonprofit is to Lease the Property from the Agency.

As mentioned, the DDA stipulates that the Nonprofit will enter into a 55-year lease with the Agency[6] for one dollar per year plus contingent annual payments predicated on the residual receipts generated by the Property.   The use of a lease instead of selling the Property to the Nonprofit would allow the Agency (and ultimately the City if the Agency ceased) to retain the Property at the end of the 55-year affordability period.  Otherwise, the Agency would need to convey the Property to the Nonprofit at no cost.  Given, the development restrictions imposed by the Agency, the Property�s residual land value (also known as reuse value) is a negative $1.07 million, which means that the Agency would need to give the land to the Nonprofit (a 100 percent land write-down) plus $1.07 million in additional Agency assistance. [7]

�      The Nonprofit is to Obtain a Permanent Loan and Use the Loan Proceeds Partially to Repay the Agency Loan.

The balance in the Agency�s rehabilitation loan would be subordinated to a loan originated from a private lender.  At the time the Property stabilizes, following completion of rehabilitation, the Nonprofit is to originate a primary loan from a private lender partially to repay the cost of rehabilitation, with the remaining loan balance repaid annually through residual receipts from the Project�s Net Profits, with any remaining balance due and payable at the end of the 55-year term.

Net Profit is defined as the net cash flow from the Property after payment of operating expenses and debt service on the loan of the bank.   Operating expenses are inclusive of actual cash expenses to operate the Property, such as maintenance and utilities and property taxes, as well as a capital replacement reserve capitalized at $300 per unit per year; a property management fee not to exceed five percent of effective gross income (EGI); an operating reserve capitalized at two percent of gross rent during the first full calendar year after completion of rehabilitation; costs of operating the Peyton-Grismer activity center, equal to 12 percent of the Property�s effective gross income, and the Nonprofit�s operational costs, equal to 10 percent of the Property�s effective gross income.

The overall cost of the Property is also the result of a conscious effort on the part of the Agency to assist the Nonprofit develop capacity to lease and operate an additional 70 units, which would constitute a 40 percent increase in its portfolio.  Since January 2000, the Nonprofit has acquired and rehabilitated the following multifamily rental units in geographically targeted or focus neighborhoods. 

While funds have been adequate to support these operational costs for Elmwood, the Nonprofit�s capacity to operate additional activity centers and fund the Nonprofit�s on-going operations is slowly being eroded because the number of smaller, individual and often distressed properties being developed by the Nonprofit fails to generate the critical mass to create adequate cash flow.     Consequently, approximately 10 and 12 percent of the effective gross income to be generated by the Property is being budgeted, respectively, to fund the Nonprofit�s operations and to operate the Peyton-Grismer activity center[8].    The net effect, of course, is to reduce the amount of conventional financing that could be supported by the Property�s net operating income.

�      The DDA Requires the Nonprofit to Obtain the Necessary Land Use Approvals and Entitlements and Imposes a Scope of Development.

The Nonprofit is to rehabilitate the Property in conformance with the Site Plan, the Scope of Development and Schedule of Performance to achieve the following development objectives:  

   q       Improve ability to drive safety through the complex (on-site circulation);

   q       Reduce the number of apartments (housing density);

   q       Increase the number of larger bedroom sizes and establish occupancy standards to reduce overcrowding;

   q       Units are to be mixed-income and nearly half the units to be affordable to very low and lower income households in perpetuity (affordability covenants);

   q       Upgrade/install play area and construct a Peyton-Grismer Activity Center; and

   q       Phase-in improvements one building at a time (stage rehabilitation) to minimize displacement of tenants.

In doing so, the following entitlements and land use approvals are applicable.  On July 16, 2002, the Authority adopted a Negative Declaration (Exhibit C) for the Peyton-Grismer Housing Revitalization project stating that no significant impact to the environment was anticipated because of the project. The proposed DDA was discussed in the project description for the negative declaration and was found to be consistent with the findings of the adopted negative declaration.   Rehabilitation and construction will require the Nonprofit to obtain all necessary building permits.

q     PROJECT SCOPE OF DEVELOPMENT

To implement these development goals, the Agency is to convey the assembled Property via a long-term 55-year lease to the Nonprofit, which is to rehabilitate the Property in accordance with the following scope of development.

1801-1815 GRISMER

   q       Twelve two-bedroom units in the buildings at 1811, 1813 and 1815 are to be reconstructed into three-bedroom units.

   q       Four units at the eastern edge of 1801 Grismer Avenue are to be demolished; tenants from 1807 Grismer (20 units) are to be displaced and the building used as a temporary relocation site as each remaining building is rehabilitated.  The building will then be demolished.

   q       Parking areas at 1801-1815 will be re-striped for approximately 112 spaces. 

1819 GRISMER

   q       The site to be cleared by the Agency is to be the site for the +2,000 square foot Peyton-Grismer Activity Center and playground to be constructed by the Burbank Housing Corporation.

1729-1735 ELLIOTT DRIVE

   q       The building at 1729 units B and C will be demolished and the remaining four buildings will be rehabilitated.

   q       Parking area will be striped for approximately 17 spaces.

Rehabilitation will include improvements and repair that has been deferred for many years including: repairing leaks, dry rot, mold, termite damage, and improving kitchen and bathroom conditions.  In addition, rehabilitation work will include asbestos and lead based paint abatement and fire protection (e.g. smoke detectors and sprinkler system).  More specifically, rehabilitation will include the following work items (1801-1819 Grismer and 1729-1735 Elliott):

  �      Remodel kitchens � specific improvements will focus on health and safety issues, however, work may include new counters, fixtures, cabinets and flooring

  �      Remodel bathroom � specific improvements will focus on health and safety issues, however, work may include new bathtubs, toilets, fixtures and flooring

  �      New doors, including wardrobe doors

  �      Upgrade electrical system

  �      Upgrade Plumbing

  �      Upgrade HVAC Systems

  �      New carpeting

  �      Interior wall repair and paint

  �      Install new windows

  �      Exterior painting

  �      Stair work

  �      Buildings re-roofed

In addition, the Nonprofit is to construct a single-story activity center (used to provide family and youth services, as well as the administrative offices of the Nonprofit) and on-site improvements.

The following chart summarizes the effect the scope of development will have on the number and the size of units:

�      The DDA Sets Forth Income and Affordability Restrictions on the Property.

The Nonprofit is to make available, restrict occupancy to and rent 14 of the apartment units to Very Low Income Households and 19 of the apartment units to Lower Income Households predicated upon a distribution of 20 percent of all units reserved for very low-income households (gross family income that does not exceed 50 percent of median income of Los Angeles County as adjusted by family size) and 27 percent of all units reserved for lower income households (gross family income that does not exceed 80 percent of median income of Los Angeles County as adjusted by family size). 

All restricted units at all times are to be rented at an affordable rental rate to very low and lower income households. Very low income units will be rented to very low-income households, who will pay a monthly rent that shall not exceed the lesser of HOME rent, as defined under 24 CFR 92.252 (a) and (b) (1), or very low income rent under Community Redevelopment Law Health and Safety Code, Section 50052.5(b) (1).  Lower income units will be rented to lower income households, who will pay a monthly rent that is not to exceed the lesser of HOME rent, as defined under 24 CFR 92.252 (a (1), as defined or lower income rent under Community Redevelopment Law, Health and Safety Code Section 50052.5(b) (1)

All restricted units may float within the Property to the extent that the substituted units are comparable in size, features and number of bedrooms to the originally designated units.  The duration of this requirement shall be known as the �Affordability Period,� which is to extend for the useful life of the Property with the land use controls imposed, but not less than fifty-five (55) years.   The Nonprofit is to make the remaining 37 apartment units available at market rents. 

�      The DDA Requires the Nonprofit to Provide Professional Property Management.

The Nonprofit is to manage the Property in a manner consistent with first‑class multifamily rental housing in Los Angeles County.  The Nonprofit may contract with a management company or manager to operate and maintain the buildings provided, however, that the hiring and termination of the Property Manager is to be subject to Agency approval.   The fees payable to the Property Manager shall not exceed five percent (5%) of the gross rents and the Nonprofit is to request the Agency�s approval of the Property Manager.   If the Property Manager is not performing to the reasonable satisfaction of the Agency, the Agency may direct the Nonprofit to use its best efforts to correct any defects in management at the earliest feasible time and, if necessary, to replace the property manager prior to the elapsing of such time period.  If the management defects identified by Agency have not been corrected within 30 days after Agency�s notice to Nonprofit, the Agency may direct, at its sole discretion, the Nonprofit immediately to terminate the Property Manager.

The Nonprofit is to adhere to an Agency approved property management plan, which includes a written tenant selection plan based upon a chronological waiting list system in which local residency is given preference and a tenant participation plan incorporating a fair lease and grievance procedure as well as a plan for tenant participation in management decisions.

Occupancy of one-bedroom apartment units shall be limited to three persons, occupancy of two-bedroom apartment units shall be limited to five persons, and occupancy of three-bedroom apartment units shall be limited to seven persons.  Notwithstanding the foregoing, however, no residents of the Property at the date of the DDA will be displaced solely because such residents do not meet occupancy standards. 

q     AGENCY RESPONSIBILITIES

  �      The Agency is to Assemble the Property.

The Agency is to acquire five buildings totaling 84 residential units at 1801-1815 Grismer Avenue and five buildings comprising 12 units at 1729-1735 Elliott Drive.   The Agency has already acquired two buildings totaling three units at 1819 Grismer Avenue.  Additionally, the Agency is to loan the Nonprofit $3.44 million for Property costs.

  �      The Agency is to Remove the Two Buildings at 1819 Grismer Avenue.

The requirement to demolish the two buildings has been satisfied.  This parcel will serve as a new entryway, as well as the grounds for the Peyton-Grismer Activity Center and an adjoining playground.

  �      The Agency is to Implement the Amended Peyton-Grismer Relocation Plan.

Under the amended plan, the Agency is to displace very low, low and moderate-income households occupying units slated for demolition, the four units on the easterly portion of 1801 Grismer Avenue, 20 units at 1807 Grismer Avenue and two units at 1729 B and C Elliott Drive. The Agency is also to assist households temporarily relocated during rehabilitation and any other requirement as prescribed by State relocation law and implementing guidelines.   

  �      The Agency is to Absorb Several Project Costs.

The Agency has conducted initial environmental studies and tests on the Property, including Phase I environmental assessments, lead-based paint and asbestos surveys, along with noticing and monitoring requirements.   The Agency has also prepared site, landscape and floor plans and paid the cost to demolish the two buildings at 1819 Grismer Avenue (Exhibit D).

PROJECT SUMMARY

Under the terms of the DDA, the City and Agency in cooperation with the Nonprofit will upgrade the Property that, without public intervention, would continue to show signs of decline characterized by poorly maintained rental units and by residents disconnected from the larger community.  The Peyton-Grismer Revitalization Project entails the Agency using its authority to assemble property blighting a neighborhood and expending its LMI funds to advance affordable housing.   The Project accomplishes a set of housing objectives that include continuing geographical targeting of resources into focus neighborhoods and working with the Nonprofit to rehabilitate substandard units and operate them as a mixed-income project with affordable rents.

The Project also requires the building of an activity center to accommodate service-enriching programs designed to emulate the results experienced at the Elmwood Achievement Center, where deep-seated changes have occurred to the neighborhood fabric.  Similar to Elmwood, the Peyton-Grismer Activity Center will offer family services intended to integrate residents into the larger community and after-school and mentoring activities for local youth.  

33433 REPORT

Section 33433 of the California Redevelopment Law requires the Agency to prepare a report whenever property purchased with Agency tax increment funds is to be sold or leased for development.  The 33433 or Summary Report (Exhibit B) sets forth the costs and benefits of the transaction to the Agency.  In addition to salient provisions in the DAA addressed heretofore, the Summary Report concluded that the fair market value of the Property, based upon an average appraised value of $77,300 for the 99 units, is estimated at $7.66 million.    The fair reuse value of the Site, on the other hand, is a negative $1.07 million due to the DDA imposing �extraordinary controls� on the Property evidenced by income and affordability restrictions on 33 units; construction of an activity center and payment for resident services at this facility; the reconfiguration of 12 units into three bedroom units; and the reduction of the total number of units from 99 to 70 units, representing an elimination of 29 residential units.

The total public assistance for site assemblage costs (acquisition, demolition and relocation) combined with an Agency loan for rehabilitation assistance and Agency soft costs are projected at $13.2 million.  KMA concluded, though, that the Agency received �fair consideration for the interests being conveyed� to the Nonprofit.  The DDA provides consideration estimated at $669,000 (the lease and contingent annual residual receipts payments) is $1.74 million more than the established fair reuse value, when compared to the negative $1.07 million in fair reuse value.   Finally, the Summary Report points out that the Agency�s Mid-Term Update to the 2000�2004 Implementation Plan mentioned the Property, and that the Property is in accordance with goals and objectives outlined in the Agency�s Implementation Plan.

FISCAL IMPACT

There will be no direct fiscal impact to the City General Fund.  However, in addition to the $2.9 million budgeted in Fiscal 2003-04 LMI funds, a budget amendment is necessary to reallocate $2.7 million from available LMI funds into the Peyton-Grismer account 305.CD23A.70005.0000.13160 to offset pending and future identified costs:

RECOMMENDATION

Staff recommends that the Redevelopment Agency and City Council adopt the attached resolutions approving the Disposition and Development Agreement with Burbank Housing Corporation and approving a $2.7 million budget amendment to the Fiscal 2003-04 Low and Moderate-Income Housing Fund.

EXHIBITS:

A         Disposition and Development Agreement

B         33433 Report 

C         Negative Declaration

D         Site Plan

E         Burbank Housing Corporation Profile

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