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THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA

M E M O R A N D U M DATE: JULY 2, 2009 HO6990 TO: CRA/LA BOARD OF COMMISSIONERS FROM: CECILIA V. ESTOLANO, CHIEF EXECUTIVE OFFICER RESPONSIBLE PARTIES: CAROLYN HULL, REGIONAL ADMINISTRATOR WILLIAM CHUN, PROJECT MANAGER SANDERS ISHISAKA, SENIOR PLANNER SUBJECT: CONSIDERATION OF USE VARIATION PURSUANT TO SECTION 1334

OF REDEVELOPMENT PLAN TO FACILITATE DEVELOPMENT OF A STUDENT HOUSING PROJECT AT 3025 SOUTH FIGUEROA STREET IN THE EXPANDED AREA OF THE EXPOSITION/UNIVERSITY PARK REDEVELOPMENT PROJECT

EXPOSITION/UNIVERSITY PARK REDEVELOPMENT PROJECT AREA SOUTH LOS ANGELES (CD 8) RECOMMENDATION That the CRA/LA Board of Commissioners approve a land use Variation from the requirements of Section 1309 of the Redevelopment Plan for the Exposition/University Park Redevelopment Project (“Redevelopment Plan”) to facilitate development of a 34 unit housing project (“Project”) at 3025 South Figueroa Street in the Exposition/University Park Redevelopment Project Area (“Project Area”).

SUMMARY The Project And The Site This action recommends approval of three Variations from specific restrictions and controls of the Redevelopment Plan to permit construction of the Project. The Project is privately financed and consists of a four-story building with 34 apartments, 65 parking spaces, and 154 bicycle spaces. The Project is proposed for an approximately 30,700 sq. ft. property at 3025 South Figueroa Street, bounded by 30th Street on the north, Figueroa Street on the east, 32nd Street on the south, and Shrine Place on the west (“Site”). The University of Southern California (“USC”) is located approximately two blocks south of the Site. The Site, owned by Ramin and Shirin Kahenassa (“Owner”), is currently improved with a one-story warehouse in which the Owner operates a manufacturing business. A Site Location Map is on Attachment “A” hereto.

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3025 SOUTH FIGUEROA STREET 2

The Project Benefits The Project is not seeking financial assistance from CRA/LA. It will nonetheless provide key benefits to the community by creating approximately 61 construction jobs through a local hiring program, generating annual tax increment revenue, and developing five affordable housing units. Two units will be affordable to very-low income households and three will be affordable to low-income households. The affordable units are larger units of 1,000 sq. ft. each, which would each provide very low-income housing for an entire family, something CRA/LA has actively pursued and supported in this Project Area. To ensure that the Project is not sold to a tax-exempt entity, Owner has agreed to covenant that the Project and Site will remain on the property tax rolls for the life of the Redevelopment Plan. The Use Restrictions On The Site The Site is currently classified by the City Zoning Code as (Q)C2-1VL-O, and has a South LA Community Plan land use designation of Community Commercial. That Plan designates the Site as “Community Commercial” with corresponding zones of CR, C2, C4, and RAS3. Thus, both the underlying zone and Community Plan use designations allow the Project on the Site with its proposed residential use. In contrast, the Redevelopment Plan designates the Site as “Commercial” which allows only commercial uses on the Site, thus necessitating the Board’s discretionary approval of the proposed residential use. The Site has two land use designations under the Redevelopment Plan. Three quarters of the Site is designated Commercial and its remaining portion is designated Medium Residential. This means the Redevelopment Plan does not permit the Project’s proposed residential uses on the Commercial portion of the Site by-right. Redevelopment Plan Section 1334 permits the CRA/LA Board of Commissioners (“Board”) to approve Variations from the above-described use restrictions. This Section states that CRA/LA is authorized, after the review and recommendation of the Project Area Committee, to permit variations from the limits, restrictions, and controls established by the Plan, if four factual findings are made. Thus, the Board has the authority to approve a Variation for the Project (from the commercial use restrictions of Plan Section 1309) if the Section 1334 findings can be made. Since the Project is vital to the continued development of the Figueroa Corridor from Staples Center on the north to Exposition Park on the south, which the Board has endorsed as a high priority, staff recommends the proposed Variation based on the Findings and Conditions below. The Required Findings To Approve The Variation Redevelopment Plan Section 1334 provides: "The Agency is authorized after the review and recommendation of the Project Area Committee, to permit variations from the limits, restrictions, and controls established by the Plan if the Agency determines that:

a. The application of certain provisions of the Plan would result in practical difficulties or unnecessary hardships inconsistent with the general purpose and intent of the Plan.

b. There are circumstances or conditions that are uniquely applicable to the property or to

the intended development of the property which do not apply generally to other properties having the same standards, restrictions, and controls.


c. Permitting a variation will not be materially detrimental to the public welfare or injurious to property or improvements in the area.

d. Permitting a variation will not be contrary to the objectives of the Plan.

In permitting any such variation, the Agency shall impose such conditions as are necessary to protect the public health, safety, or welfare, and to assure compliance with the intent and purposes of this Plan. No variation by the Agency shall be effective until conditional uses, variances, or other zoning changes, if any, have been obtained such that the development which is the subject of the variation is consistent with all applicable City zoning ordinances. Such construction authorized by the variation shall commence within one year unless extended for a longer period of time by the Agency after the review and recommendation of the Project Area Committee." The Facts Which Support The Required Findings Based on the findings below, staff recommends that the Board approve the Variation from the use restrictions of Redevelopment Plan Section 1309, subject to the conditions set forth in the BACKGROUND below. a. Unnecessary Hardships The objectives of the Redevelopment Plan and of recent City policies are hindered by strict compliance with the commercial use designation of the Site under Plan Section 1309. Strict compliance with that Section requires Owner to develop a commercial project that is at odds with the current real estate market’s pressing demand for student housing. Such compliance would burden Owner with the unnecessary hardship of limiting the Site’s redevelopment potential in a way that conflicts with Redevelopment Plan objectives. These objectives include: (i) make provisions for housing as is required to satisfy the needs and desires of the various age, income, an ethnic groups of the community, maximizing the opportunity for individual choice, (ii) alleviate overcrowded, substandard housing conditions and promote the development of a sufficient number of housing units for low and moderate income households, and (iii) implement the City’s policy to establish opportunity areas to specifically encourage private investment, consistent with the Plan’s objectives in housing, commerce and industry. The proposed Variation frees the Project to implement the housing goals of the Redevelopment Plan. First, the Project’s 34 new units help alleviate the off-campus housing pressures of USC students on surrounding residential communities. Such housing pressures result in higher prices for existing housing, and puts students in competition for the limited supply of affordable housing with local lower-income households. Such demand also results in single-family home room additions and parking overflow onto local streets. Second, recognizing the need to alleviate this pressure with new student housing, the Board recently approved three student housing developments in the Project Area through similar Variation approvals. These are: (i) “University Gateway” consisting of 421 units with 83,000 sq. ft. of commercial space located at 3760 South Figueroa Street; (ii) “Tuscany” consisting of 120 units with 14,800 sq. ft. of commercial located at 3760 South Figueroa Street; and (iii) “Icon Plaza” consisting of 56 units with 18,220 sq. ft. of commercial located at 3574-3584 South Figueroa Street. The proposed Variation also frees the Project to implement the City’s recently adopted Figueroa Street Corridor General Plan Amendment. This Amendment: (i) designates properties along


Figueroa Street (including this Site) for Community Commercial uses, permitting a maximum FAR of 4.5:1 for mixed-use residential projects; and (ii) designates properties on Figueroa Street and the west side of Flower Street for projects housing students and their families. Similarly, the Project will help implement the City’s North University Park – Exposition Park – West Adams Neighborhood Stabilization Overlay District. This new District aims to redirect housing pressures away from existing low density neighborhoods and toward Figueroa Corridor, where the Site is located and where student housing developments are encouraged. b. Exceptional Circumstances The Site is subject to unique circumstances that do not generally apply to other commercial-designated properties in the Project Area. First, the Site’s long rectangular shape with narrow street face lends itself to non-commercial uses. The Site has only about 120 feet of frontage along Figueroa Street. This minimal frontage renders the Site more suitable for other uses (i.e., residential) since ample street frontage and parking on major commercial corridors are vital to commercial business viability. Thus, the Plan’s commercial use designation coupled with the Site’s limited street frontage create a unique land anomaly which blocks the Site from serving an existing housing market for which it is geographically suited. Second, the Site’s adjacency to residential uses lends itself to the proposed residential Project. Three quarters of the Site is designated as “Commercial” and the remaining portion is designated as “Medium Residential”. Thus, the Redevelopment Plan intends for residential use on the rear portion of the Site that abuts other multifamily residential buildings. In addition, the Site is adjacent to an existing motel, which is a form of residential use. Third, there is currently miniscule to non-existent demand for a commercial development on this narrow rectangular Site. Instead, there is pressing demand for student housing on the Site as documented by numerous studies (i.e., the USC Draft Master Plan estimates a need for an additional 7,600 new beds by 2030). Thus, the Plan’s commercial use designation coupled with the Site’s limited street frontage create a unique impediment to meeting the housing market‘s demand for the Site and to implementing the Plan’s housing objectives. c. No Material Detriment To Public Welfare The Site is within the Figueroa Corridor, a major transit and commercial corridor linking Downtown’s sports and entertainment facilities to cultural and institutional resources in South Los Angeles. The proposed Project expands ongoing redevelopment of this Corridor, which has received increased public and private investment in recent years. The Project, in combination with student housing developments recently approved in the Project Area, will help alleviate the described student housing pressures. Recognizing the opportunity for the Figueroa Corridor to accommodate higher density development which eases the housing shortage, the City Council recently added Footnote No. 14 to the Southeast Los Angeles Community Plan, which identifies the Site as eligible for a height district change to 2D and an FAR up to 4.5:1 for a mixed use project with student housing. By utilizing Footnote No. 14, the proposed Project will contribute to alleviating the student housing shortages. Equally important, the Site’s adjacency to transit infrastructure, including station stops of the existing Harbor Transitway and the under-construction Exposition Light Rail Line, will make


public transportation more conveniently accessible for a greater number of people and facilitate reduced dependence on automobile use. Close proximity to USC and the provision of ample bicycle parking will permit more students to walk or bike to campus and further increase the pedestrian orientation of the University/Exposition Park area. Therefore, the requested Variation will not be materially detrimental to the public welfare in the Project Area, but rather, will enhance it in the above-described ways in the years to come. d. Achievement Of Plan Objectives Approval of a use Variation for the proposed Project helps achieve Redevelopment Plan Objectives and those of its 5 Year Implementation Plan. The purpose of the Redevelopment Plan is to encourage retention and expansion of USC, and eliminate blighting conditions in its surrounding area. The Project does that and also implements the following Plan objectives:

• To make provision for housing as is required to satisfy the needs and desires of the various age, income, and ethnic groups of the community, maximizing the opportunity for individual choices.

• To alleviate overcrowded, substandard housing conditions and to promote the development of a sufficient number of housing units for low and moderate income households.

• To encourage the cooperation and participation of property owners in the revitalization of the area.

• To eliminate and prevent the spread of blight and deterioration and to redevelop the Expanded Project Area in accordance with the Plan.

• To implement the City’s policy to establish “opportunity areas” to specifically encourage private investment, consistent with the Plan’s objectives in housing, commerce and industry.

Approval of the Variations will allow development of a Project that helps meet the community's need for increased student accommodations. In providing the 34 new units, the Project reduces the intense competition for existing housing in the surrounding residential neighborhoods. Associated economic benefits are employment opportunities in property management, as well as sales, property, business, and utility tax revenues. RE Initial Action. SOURCE OF FUNDS No funding is required for this action. PROGRAM AND BUDGET IMPACT The proposed actions will not require CRA/LA funds except for staff working on the Project. There is no fiscal impact to the City's General Fund as a result of the recommended actions. . ENVIRONMENTAL REVIEW


The recommended action is categorically exempt from the California Environmental Quality Act (“CEQA”) pursuant to the provisions of Section 15332 (In-Fill Development Projects), of the California Code of Regulations (i.e. CEQA Guidelines). BACKGROUND The Variation Conditions As stated above, Plan Section 1334 provides that under exceptional circumstances CRA/LA is authorized to permit and condition Variations from the limits, restrictions, and controls established by the Plan. Staff has reviewed the Project’s submitted Schematic Design Drawings and recommends approval of the Variation (with the following conditions) to facilitate its construction:

1) Owner shall submit Final Construction Documents and Final Landscaped Plans to CRA/LA staff for review and approval.

2) Owner shall execute and record an “Owner’s Acceptance of CRA/LA Conditions” and

appended Schedule of Performance. This Owner’s Acceptance document will define the scope of work, and obligate the Owner to construct the Project in accordance with the Approved Documents and Schedule of Performance. This document will also obligate Owner not to file for an exemption or challenge the property tax assessment for the Project, or subsequent annual adjustments, provided that the initial assessment and subsequent annual adjustments are reasonably calculated consistent with generally applicable methodologies for property tax assessments in the County of Los Angeles. This restriction applies to Owner’s successor(s) in interest, if any, and shall be in effect from the effective date of the executed “Owner’s Acceptance” document and shall be in effect for the life of the Redevelopment Plan.

3) Owner shall construct the Project in compliance with CRA/LA approved Landscape Plan,

Public Improvement Plan, and Final Construction Documents.

4) Owner shall restrict five of the units to be made affordable to very-low income households (2 units) and low-income households (3 units) by execution and recordation of affordable housing covenants. Term of covenants shall run for 55 years.

The Project Design The Project is designed to comply with the intent of the CRA/LA Public Improvement Standards for Figueroa Street. The residential units will likely be rented by USC students and/or faculty, but the Project is not limited to student housing. The first level will be the building’s lobby and parking for both vehicles and bicycles. The first residential floor (second level) will contain a recreation room and a covered open space area and an exercise room. The third level floor will include a laundry room. On the fourth level, there will be an additional laundry room and lounge for all residents. The building will consisting of 25 two-bedroom, 2 three-bedroom, 2 four-bedroom, and 5 five-bedroom units. The Community Support


On September 16, 2008, the Exposition/University Park Community Advisory Committee (“CAC”) reviewed the Conceptual Design Plans for the Project and voted to support the proposed Project. Councilmember Bernard Parks (CD 8) supports the recommended action. Cecilia V. Estolano Chief Executive Officer By ________________ Glenn F. Wasserman Chief Operating Officer There is no conflict of interest known to me, which exists with regards to any CRA/LA officer or employee concerning this action. Attachment: A – Site Location Map

B – Preliminary Plans


ATTACHMENT A SITE LOCATION MAP

3025 SOUTH FIGUEROA STREET

Existing Building


ATTACHMENT B PRELIMINARY PLANS

SITE PLANS


ATTACHMENT B, cont. PRELIMINARY PLANS

FLOOR PLANS



FLOOR PLANS



BUILDING ELEVATIONS