THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA M E M O R A N D U M

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1 THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA M E M O R A N D U M 14 DATE: SEPTEMBER 15, 2011 RP TO: CRA/LA BOARD OF COMMISSIONERS FROM: STAFF: SUBJECT: CHRISTINE ESSEL, CHIEF EXECUTIVE OFFICER MARGARITA H. DE ESCONTRIAS, REGIONAL ADMINISTRATOR OSCAR IXCO, PROJECT MANAGER VICKI GILKEY, ASSISTANT PROJECT MANAGER Child Development Institute DDA Amendment and $142,000 Funding Increase. Amend Disposition and Development Agreement with Child Development Institute to increase funding by $142,000 from $715,000 to $857,000 for related costs of additional structural and electrical upgrades required by the Los Angeles Department of Building & Safety during rehabilitation of the former Canoga Park Library, at 7260 Owensmouth Avenue in the Disaster Assistance Project for Portions of Council District Three WEST VALLEY REGION (CD3) INVESTMENT COMMITTEE: N/A RECOMMENDATION The CRA/LA acknowledges and understands that the Supreme Court in the case entitled California Redevelopment Association v. Matosantos stayed certain portions of Assembly Bill x1-26 and Assembly Bill x1-27. Given the Court s stay and the uncertain status of such legislation, although the CRA/LA is, and the City Council may be, approving certain actions as described herein, to the extent that such actions are stayed then the CRA/LA shall not execute agreements or take such actions, notwithstanding their approval hereof, until the Supreme Court has decided the case on the merits or the action is no longer stayed. That the CRA Board of Commissioners take the following action: 1. Request that the City Council acknowledge and approve CRA/LA s implementation of the proposed Project under the Cooperation Agreement for Payment of Costs Associated with Certain CRA/LA Funded Capital Improvements, Public Improvements and Affordable Housing Projects, dated as of March 10, 2011 between the CRA/LA and the City of Los Angeles. That the CRA/LA Board of Commissioners, subject to City Council approval: 2. Authorize the Chief Executive Officer (CEO) or designee to negotiate and execute an amended Disposition and Development Agreement ( DDA ) by and between the CRA/LA and Child Development Institute ( CDI ) to increase funding by $142,000 of Reseda-Canoga Park Tax Increment in budget line item Community Facilities and Programs from $715,000 to $857,000, towards additional costs associated with structural and electrical upgrades required by the Los Angeles Department of Building and Safety ( LADBS ) identified during the rehabilitation of the former Canoga Park

2 AMENDMENT TO DDA WITH CDI PAGE 2 Library building located at 7260 Owensmouth Avenue in the Disaster Assistance Project for Portions of Council District Three; 3. Recognize and authorize expenditure of $142,000 of FY2012 Reseda-Canoga Park taxable Bond Proceeds towards additional costs related to structural and electrical upgrades by the LADBS; and SUMMARY Approval of the recommended action will enable the Chief Executive Officer or designee to execute and amendment to the DDA by and between the CRA/LA and CDI, executed on September 22, 2009, to increase funding by $142,000 from $715,000 to $857,000 towards the rehabilitation and reuse of CRA/LA-owned property known as the former Canoga Park Library located at 7260 Owensmouth Avenue (Attachment A Location/Site Map). The increase in funding provided through the DDA will serve to reimburse CDI for additional costs incurred for infrastructure and electrical upgrades that were identified by LADBS as being required to complete the restoration of the historically-designated building as an Early Learning Center. The City s General Services Department prepared the original scope of work and cost estimate for the structural work needed for CDI s proposed floor plan and did not include any structural upgrades, hazardous material abatement, or replacement of the electrical switchgear box as being necessary or required. During the plan check process, LADBS required a full seismic/structural analysis of the building that resulted in a need to strengthen the roof/column connections with steel plates and upper clerestory concrete ring to bring the building into code compliance. During construction, which began in September 2010, LADBS wrote a correction notice to upgrade or replace the electrical switchgear box to meet the fault current. As previously indicated, both items were not foreseen as being necessary and were not reflected in the cost estimate for the original scope of work. The cost to complete the structural upgrades and replacement of the electrical switchgear box was approximately $142,000 (Attachment B Project Budget). Project construction was completed in August 2011 and CDI s Early Learning Center plans to begin operations in September The final payment to the contractor for the electrical and structural upgrades is outstanding and CDI requires approval of the additional funding reflected in the amended budget for reimbursement to secure a bridge loan to finalize payment. PREVIOUS ACTIONS June 30, 2009 City Council authorized CRA/LA to take various actions related to the DDA with CDI (CF# ) May 23, 2007 City Council authorized CRA/LA to enter into an ENA with CDI (CF# S1) DISCUSSION & BACKGROUND CRA/LA executed a DDA with CDI in September of The terms of the DDA provide for a 30-year lease of the CRA/LA-owned property for $1 a year and the option of two (2) ten-year extensions. The use of the building is restricted and during the period of the lease will be a child development center, providing services to the needs of families in the surrounding communities. CDI s experience indicates that such a center will be most effective in the specific location by providing more additional and supportive promotion and prevention services. The DDA provided a grant in the amount of $715,000 that was used to cure the vandalism that occurred during the time the building was vacant. The grant also was approved to be used to

3 AMENDMENT TO DDA WITH CDI PAGE 3 make necessary repairs and add two ADA compliant bathrooms. Based upon the proposed floor plan and examination of the building, Los Angeles City General Services Department (GSD) prepared a scope of work and cost to build the infrastructure work which did not include any structural upgrades. CDI agreed to provide, at its expense, additional tenant improvements including, but not limited to, a build-out of offices, landscaping, fencing and development of a children s play yard. The initial understanding between the CRA/LA and CDI was that the CRA/LA would be responsible to construct only the necessary infrastructure improvements and for CDI to be responsible and construct only the tenant improvement work. Although the estimate provided for the scope originated with GSD, given the inherent difficulties, coordination and scheduling issues with having different construction and architect teams split the work into infrastructure and tenant improvement packages, the new direction was that the CRA/LA would fund the project rather than construct using GSD services, and then turn the building over to CDI for the tenant improvements. Before the DDA was executed CDI hired a structural engineer to do a walk-through observation of the structure to see if there were any obvious structural problems. It was noted that the building was on the historical registry and while there is some latitude given to historic buildings, the change in occupancy from a library to a child development center might require a code upgrade and to verify with LADBS. A meeting was set up with LADBS Case Management to specifically address the structural upgrade issue as well as other issues regarding the project. At this meeting it was verified that the change in occupancy or the tenant improvements would not trigger structural upgrades. However, during plan check corrections came back requiring a full seismic/structural analysis of the entire existing historical building, which called for the structural upgrades; the project bidding was delayed a couple of months for redesign and cost reductions. During electrical plan check the electrical permit was obtained with the existing switchgear in place. However, during construction the electrical inspector wrote a correction notice that the switchgear should be upgraded or replaced to meet the fault current. Even though the new proposed electrical load was less than the capacity of the existing switchboard, there were new regulations and the existing outdated switchgear did not have the appropriate labels that are now required on new switchgears. After weighing the possible scenarios in trying to keep the existing switchgear box, the decision was to replace it as required by LADBS and DWP to avoid significant delays and possibly more additional cost to the project and a new electrical permit was obtained. CDI is unable to provide the funding for the structural upgrades and replacement of the switchgear box because the grant funding provided to them from the Keck Foundation and the Child Care Resource Center for the project allowed only for the tenant improvements and the Early Learning Center operations, which also includes a Head Start program. The unforeseen cost associated with the structural upgrades and replacement of the switchgear box created a shortfall after completing the project and will require CDI to secure a bridge loan to complete payment to the general contractor. Location The former Canoga Park Library is located at 7260 Owensmouth Avenue and is listed as a City Historical Monument (Monument No. 700). Developer Entity The Child Development Institute is a non-profit corporation providing early childhood program services for thirteen years. CDI offers home visits and clinic-based services to young children and their families when there are developmental concerns, identified delays and disabilities,

4 AMENDMENT TO DDA WITH CDI PAGE 4 difficulty with attachment and/or family stresses. Developmentally based, relationship-focused interventions addressing social/emotional, speech and language, sensory and motor development and school readiness are available through CDI s multi-disciplinary staff. CDI also conducts a workforce development program, which will offer community opportunities for careers in early childhood development. The organization currently offers numerous training programs in collaboration with California State University at Northridge and Pierce College. Project History In April 2007 the CRA/LA entered into an Exclusive Negotiating Agreement with CDI for the sale and adaptive reuse of the property. During the negotiations and further consultation with Council District Three Office and CRA/LA management, it was concluded that it was in the interest of the CRA/LA to retain ownership of the property and negotiate to lease the property for adaptive reuse. In September of 2009 CDI and CRA/LA executed a DDA that provided for a 30-year lease of the library and a grant of $715,000 for funding assistance toward the rehabilitation of the building. Construction began in September of In May of 2011 during the last phase of construction a meeting was organized with Councilmember Dennis Zine, CDI, LADBS and CRA/LA staff to discuss the reasons leading up to the required structural and electrical upgrades. At the conclusion of the meeting it was agreed by all parties that the CRA/LA should amend the DDA with CDI to provide for the incurred additional cost. Community Benefits The Project is consistent with the goals and objectives of the Redevelopment Plan, as it promotes the establishment and development of business which serves the identified needs of the community, enhances the commercial environment and maximizes the creation and retention of jobs and economic opportunities for area residents. Variances from CRA/LA Policies and/or Guidelines None SOURCE OF FUNDS Reseda-Canoga Park Taxable Bond Proceeds PROGRAM AND BUDGET IMPACT The recommended action will transfer $142,000 of Taxable Bond Proceeds into the Proposed FY2012 Budget and Work Program, pending Council action, relating to the Reseda-Canoga Park Project Area. The new resources identified are available within the Project Area budget line Economic Development (RP2070). Sufficient funds remain in the Reseda-Canoga Park Project Area budget to pay their shares of required Voluntary Alternative Redevelopment Program (VARP) transfers to the City for remittance to the County Auditor-Controller. There is no impact on the City s General Fund as a result of this action.

5 AMENDMENT TO DDA WITH CDI PAGE 5 ENVIRONMENTAL REVIEW The proposed project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Sections (a) and (d) and of the CRA/LA and State CEQA Guidelines. PROJECT SUPPORT Councilman Dennis P. Zine has demonstrated support of the recommended action. Christine Essel Chief Executive Officer By: Dalila Sotelo Deputy Chief Executive Officer There is no conflict of interest known to me which exists with regard to any CRA/LA officer or employee concerning this action. ATTACHMENTS Attachment A: Location/Site Map Attachment B: Project Budget Attachment C: Project Summary Report

Reseda / Winnetka / Canoga Park CRA / LA

Agency REMMET AVE OWENSMOUTH AVE ATTACHMENT A

Parking Lot RESEDA BLVD ROSCOE BLVD SATICOY ST

AV CANOGA AV DE SOTO AV NORDHOFF ST 1:900 0 12.

6 Reseda / Winnetka / Canoga Park CRA / LA Redevelopment Project Community Redevelopment Agency REMMET AVE OWENSMOUTH AVE ATTACHMENT A WYANDOTTE ST Site Canoga Park Library Library Parking Lot RESEDA BLVD ROSCOE BLVD SATICOY ST TAMPA AV VANOWEN ST BALBOA BLVD SHERMAN WY WINNETKA AV CANOGA AV DE SOTO AV NORDHOFF ST 1: inch = 75 Feet PREPARED BY CRA GIS TEAM Kim Pfoser, Principal Planner Tom Weisenberger, GIS Analyst Ron Wagner, GIS Analyst (D&W Consulting) 12/10/ Feet City of Los Angeles

7 CHILD DEVELOPMENT INSTITUTE 6/11/11 Project Sources & Uses Totals Project Funding Sources Community Redevelopment Agency $ 715,000 Keck Foundation $ 250,000 Windsong $ 250,000 CDI Restricted Funds $ 303,671 Total Project Funding Sources $ 1,518,671 Project Budget Hard Costs Totals T.I. Building & Site Construction $ 1,296,533 Structural Upgrades (see breakdown) $ 101,943 New Electrical Switchgear (see breakdown) $ 40,000 Soft Costs Permits, Fees, Design, Testing $ 225,530 Total Project Development Costs $ 1,664,006 6/11/11

8 Infrastructure Change Order Costs Item Cost Structural Upgrades Structural reinforced concrete compression ring at $ 28,160 upper clerestory Fiberwrap & Strengthen Structural columns $ 26,901 Structural Plate Connections to roof $ 18,360 Structural Design, Analysis & Approvals $ 27,500 Additional Building Plan Check Fees $ 1,022 Total $ 101,943 New Electrical Switchgear New Switchgear box for new service $ 24,000 Rewiring, Conduits, remove existing switchgear $ 10,000 Design, Plan Check & Contractor costs $ 6,000 $ - Total $ 40,000

PROJECT SUMMARY REPORT WEST VALLEY REGION Maps created by CRA/LA GIS Team STATISTICS AT A GLANCE Estimated Jobs Created: Construction Jobs (est.): 10 Permanent Jobs (est.

09% RESEDA/CANOGA PARK CANOGA PARK LIBRARY Board Item Number: Board Date: 9/15/2011 Project Location 7260 Owensmouth Ave, Canoga Park, CA 91303 Proposed CRA/LA Action Child Development Institute.

upgrades required by the Los Angeles Departent of Building Additional Information N/A Elected Officials Council District 3, Dennis P.

9 PROJECT SUMMARY REPORT WEST VALLEY REGION Maps created by CRA/LA GIS Team STATISTICS AT A GLANCE Estimated Jobs Created: Construction Jobs (est.): 10 Permanent Jobs (est.): 20 Total Development Costs (TDC): $3 million CRA/LA Investment: $2 million CRA/LA Investment % of TDC: 54.09% RESEDA/CANOGA PARK CANOGA PARK LIBRARY Board Item Number: Board Date: 9/15/2011 Project Location 7260 Owensmouth Ave, Canoga Park, CA Proposed CRA/LA Action Child Development Institute. Amendment to Disposition and Development Agreement with Child Development Insitute to increase funding by $142,000 from $715,000 to $857,000 for related costs of additional structural and electrical upgrades required by the Los Angeles Departent of Building Additional Information N/A Elected Officials Council District 3, Dennis P. Zine County Supervisor District 3, Zev Yaroslavsky State Senate District 20, Alex Padilla Congress District 27, Brad Sherman Assembly District 40, Bob Blumenfield Project Description This project involves renovation of the former Canoga Park Library, built in 1959, for adaptive reuse as Child Development Institute facility for special needs youth. The building is listed on the City Historic Cultural Monument List (#700) Project Type Community / Public Facility Construction Category: Rehabilitation Project Features: Childcare Facility / Child Development Center Educational Facility Nonprofit Organization Developer / Participant(s) Developer: Child Development Institute (CDI) CRA/LA Project Staff Margarita De Escontrias, Regional Administrator Craig Bullock, Associate Planner Vicki Gilkey, Assistant Project Manager Project Activities Completed Activities: Board Action, 01/20/05 City Council Action, 05/25/05 Board Action, 04/05/07 City Council Action, 05/23/07 Investment Committee, 02/10/09 Board Authorization to Execute Agreement, 04/16/09 City Council Approval to Execute Agreement, 06/30/09 Execute Agreement, 10/19/09 Design Drawings Review, 01/19/10 Design Drawings Approval, 01/19/10 Preparation of Construction Drawings, 06/09/10 Groundbreaking Ceremony, 09/28/10 Pre Construction Meeting, 10/07/10 Construction Start, 10/07/10 Funds Disbursement, 01/25/11 Funds Disbursement, 02/24/11 Funds Disbursement, 04/05/11 Funds Disbursement, 05/03/11 Funds Disbursement, 06/16/11 Certificate of Occupancy, 07/08/11 Sustainable Elements Diversion of Construction Waste Improved Indoor Air Quality Materials Conservation and Reuse No or Low VOC paint, carpeting, and/or adhesives On Site Renewable Energy On site Storage Area for Recyclable Materials Public Open Space Stormwater Management Water Efficient Landscaping LEED Attainment Level, Type Certified, Formal Certification Community Benefits Adaptive Reuse CDI will offer workforce development program for career training in early childhood development. CDI will serve the community by providing services to families with developmentally challenged children. Development of underused lot Elimination of Blight Enhance access to public services Enhance Public Safety Historic Preservation Living Wage Jobs Neighborhood Stabilization Prevailing Wage Jobs Provides Local Education Opportunities Provides Social Services to Community Spanish speaking staff will be housed at the facility to better serve the community. Strategic Plan Goals Met Create 40,000 construction career path jobs Create at least two publicly accessible green open spaces in CRA/LA neighborhoods every year in Partner in at least 3 of the following activities in each region annually: special cultural events, Build deeper relationships with key stakeholders such as labor, business organizations, affordable... CRA/LA Policies Applied Child Care Construction Careers & Project Stabilization Contractor / Service Worker Retention Contractor Responsibility Equal Benefits Living Wage Prevailing Wage Public Art Policy CRA/LA Policies Not Applied Not Applicable to the Project Housing Policy, Affordable housing only. Construction Jobs Local Hiring Program, Project cost in excess of $1 million. Labor Peace Agreement, Hotel projects only. Project ID: Objective Code(s): RP2070 Scheduled Activities: Project Completed, 05/20/11 Data Last Updated: 8/25/2011 Report Generated: 8/25/2011

of tbe CITY OF LO S A NGE LES

~~ CRA LA BUILDING COMM UNITIES of tbe CITY OF LO S A NGE LES DATE I ocr 6 2011 1200 W es t 7th Street Suite 500 Los Angeles 1 Cal ifornia 90017-238.1 r w~..., F 213 977 1665 CRA File No. Council District: