Santa Monica City Housing Trust Fund Loans Forgiven, Extended
Posted Sep. 27, 2012, 1:11 am
Parimal M. Rohit / Staff Writer
Council members unanimously approved last week a consent calendar item forgiving one Housing Trust Fund (HTF) loan and extending another attached to a pair of properties in Santa Monica.
The item was pulled from the consent calendar by Council member Bobby Shriver and considered as a separate item. Shriver was concerned whether the loan forgiveness of about $125,000 could be taken as providing a public gift to a private party.
However, City Attorney Marsha Jones Moutrie pointed out loan forgiveness is a normal course of action when it comes to public housing. The loan in question was attached to Mountain View Mobile Home Park at 1930 Stewart Street; the specific amount forgiven was $124,977.01.
“It’s very typical for the City (of Santa Monica) to forgive housing loans when the funds are used to provide particularly very low income housing,” Moutrie said. “In this case because the purpose is providing affordable housing within the community, I don’t think it’s a problem.”
The city staff report stated that it “recommends forgiving the loan … because the goal of acquiring the property and preserving it as affordable housing has been achieved.”
In addition to the loan forgiveness, another loan was authorized to be extended until December 2014. The loan is in the amount of $1,161,185 and allocated to be used “for an existing acquisition and predevelopment loan to Community Corporation of Santa Monica (CCSM) … for 1342 Berkeley Street.”
City Hall issued a loan in 1996 to the Mountain View Mobile Inn Residents Association to the amount of $272,000, according to city staff, “for the purpose of performing due diligence associated with the conversion of the property to cooperative housing and the anticipated acquisition of the mobile home park by residents.”
However, city staff said the plan was “not feasible” and City Hall ultimately purchased the property and maintained it as an affordable housing location.
Still, a portion of the $272,000 loan agreement – specifically, $124,977 – was actually dispersed.
“Since Mountain View served mostly very-low and low-income households, the City Council supported the effort toward resident ownership and maintaining affordability of this housing resource,” city staff told council members of the original plan to allow residents to ultimately acquire the mobile home park.
In 2000, the City purchased Mountain View and made more than $5 million in infrastructure upgrades. During the past 12 years, City Hall reports 19 travel trailers and mobile homes “have been replaced with affordable and sustainable manufactured homes.” Just the same, a financing program was approved two years ago for the installation and manufacture of nine new homes.
The loan extension to CCSM was, according to City Hall, issued in 2004 “for the acquisition and predevelopment of a small lot in conjunction with a larger, adjacent lot that has since been developed as 47 affordable residences.”
City Hall seeks an extension “to allow sufficient time to create an approach to developing this site for affordable housing.”
CCSM currently owns a vacant parcel at 1342 Berkeley Street. A financing application was approved in 2004 for $1,161,185.
“Since executing the acquisition/predevelopment loan in February 2004, the development of 1342 Berkeley Street was given low priority to allow CCSM and the Housing Division to focus on several other affordable housing developments that were in the pipeline,” city staff said. “The low priority reflected the fact that the small lot would only accommodate a very small project (5-8 units) that could be difficult to finance.”