To: Planning Commission

From: Zina Josephs

RE: Village Trailer Park development agreement — 6/20/12 agenda item 9-A

I urge the Planning Commission, in any recommendation to City Council:

(1) to mandate that the developer look at the alternate proposal, and

(2) to recommend that any proposed Development Agreement not be approved until after the Bergamot Area Plan is adopted.

At the May 30th Planning Commission meeting, Ron Goldman presented information about an alternate Village Trailer Park project that could preserve approximately half of the trailer park, while allowing the owners to develop the western half of the property.

Mark Luzzatto responded on May 30th that Mr. Goldman’s plan was “economically infeasible” and that it “fails to achieve a number of the LUCE goals.”

A) Additional information provided by Mr. Goldman (below and attached) demonstrates that the alternate project would be economically feasible.

B) The LUCE states that:

“The heart of Santa Monica is its vibrant neighborhoods, from which the City draws its strength, vitality and diversity.” (2.2-1)

Regarding “Conserving and enhancing Santa Monica’s residential neighborhoods,” key issues citywide include: “Demolition of existing homes and the loss of affordable residential units.” (2.2-2)

“Renters and homeowners alike advocate for neighborhood conservation so that future generations may enjoy the same benefits and experiences….The LUCE responds to these issues by outlining both citywide and specific neighborhood goals, policies and actions that aim to preserve the scale, character and quality of life of the existing neighborhoods.” (2.2-3)

“The Pico neighborhood has a rich cultural heritage and social diversity….The low-scale character of the neighborhood fosters a strong sense of community….This neighborhood strives to maintain its culturally diverse and family-oriented resident base in the face of increasing redevelopment pressure.” (2.2-24)

“The Pico neighborhood maintains its culturally and economically diverse character by employing a variety of neighborhood conservation programs, including striving to maintain affordable housing units, thereby retaining long-term residents and social diversity.” (2.2-25)

Village Trailer Park is adjacent to the Mid-City neighborhood, and the LUCE “vision” for that neighborhood includes: “Mature trees and other forms of landscaping are preserved.” (2.2-37)

This would seem to indicate that preserving all, or even part, of the Village Trailer Park would achieve a number of LUCE goals.

If the Village Trailer Park is destroyed, it would be the first time since 1979, when the city’s Rent Control ordinance was passed, that the city would be willing to evict a tightly-knit community of homeowners. If that precedent is set, will Sunset Park residents who live under the SMO departure flight path have to worry that their homes will also be taken away, in order to somehow increase city revenue from the airport? I hope not.

Again, I urge the Planning Commission to review the information below from Ron Goldman, mandate that the developer seriously consider Mr. Goldman’s alternate project proposal (and base his financial analysis on the actual purchase price of the property), and recommend that no Development Agreement be approved until after the Bergamot Area Plan is adopted.

Thank you for your consideration.

*************************************************************************************************************************
From: ron@gfarchitects.com
To: andersonsmpc@yahoo.com, kennedyrcb@aol.com, bikeitday@gmail.com, gnewbold@gmail.com, parryj@gte.net, Jim_Ries@hotmail.com, tedsmplan@gmail.com
CC: David.Martin@SMGOV.NET, Jing.Yeo@SMGOV.NET
Sent: 6/18/2012 4:47:10 P.M. Pacific Daylight Time
Subj: Village Trailer Park economic feasibility

Commissioners,

Using the developer’s numbers but with a land cost based on approximate purchase price and including the developer’s dubious claim of 6 years of losses estimated at $150,000 per year: developing 1⁄2 the site shows a developer profit of $16,639,988, a developer yield of 22.93%, and a return-on-equity of 9.55%. In my experience, this represents a very attractive package for a developer.

Additionally, if the land value increased from a purchase price of $4.5m to $22m, the city should receive 1⁄2 the increase or $8.75m in benefits, not the $4.65m on the applicant’s pro forma; the developer will still receive substantial profit, yield & r.o.e.

It is interesting to note that of the 80 public speakers – 1⁄2 were young and 1⁄2 mature in age – the alternative plan (1/2 mixed use development and 1⁄2 VTP) responded equally to both these constituencies.

Respectfully submitted,

Ron Goldman FAIA
Goldman Firth Rossi Architects
Malibu, California