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City to Begin Negotiating Record 570-Unit Project

By Jorge Casuso

October 2, 2023 -- The City Council last week gave the go-ahead to execute an exclusive negotiating agreement that could result in the largest residential development in Santa Monica history.

Affordable housing developer AMCAL Multi-Housing, Inc. -- which was chosen from among 11 bidders -- is proposing a 338-unit project on a 1.85-acre site on City owned land near the Expo terminus Downtown, a company representative told the Council.

The project, however, could grow to some 570 units if AMCAL is successful in purchasing an adjacent half-acre site owned by Gen-Land LLC, a Texas limited liability company that would build market rate units on the site.

And it could grow even larger if AMCAL pursues density bonuses for the contemplated 8-story development, which is seeking $30 million in State funding to develop infrastructure, said Alex Pratt, the company's vice president of development.

That would make it larger than the 521-unit Lincoln Center project at the Gelson's site that is slated to be the the city's biggest housing development in nearly 60 years ("News Analysis -- Gelson's Proposed Project Is a Done Deal Under State Law," February 23, 2023).

"We feel we're a good match for Santa Monica, because we're a very sophisticated group," Pratt told the Council before it unanimously voted without comment to enter into exclusive negotiations.

AMCAL, Pratt said, is building several large affordable housing developments in California, including a 360-unit project for farm workers in Ventura County with its own water supply.

The vote comes after the Council last October declared the seven City-owned parcels adjacent to the Expo terminus "surplus land" under State law and issued a notice of availability to affordable housing developers.

Of the 11 proposals received, nine "were structured to develop affordable housing requiring varying levels of financial assistance from the City," staff wrote in a report to the Council.

The assistance would come in the form of "a partial or full land subsidy, a long-term repayment plan with payback based on available residual receipts, or a combination of both," staff said.

Only AMCAL and Cypress Equity, which is developing the Gelson's site, "offered to construct affordable housing without any financial support or a land subsidy from the City and to purchase all seven parcels associated with the Property as a bundle for the full appraised fair market value."

Presented on July 25 with offers from the two developers in closed session, the Council directed staff to end negotiations with Cypress Equity -- which proposed to increase the number of affordable units but reduced the purchase price.

AMCAL "proposed to build additional housing units while maintaining their original purchase offer" and acquire the adjacent commercial building at 1640 5th Street "to redevelop the entire assemblage site to produce additional housing units," staff said.

Staff recommended that the Council vote last Tuesday to enter into an exclusive negotiating agreement "to establish the framework to allow staff to negotiate the schedule of performance including length of time to complete negotiations, development terms, financing, and the community input process."

If the negotiations are successful, under State housing law the public would have limited input on design aspects of the project before it is given administrative approval by planning staff.

There would be no meetings before the Planning Commission or City Council and no Environmental Impact Report (EIR) for the project, which is exempt from further review under California Environmental Quality Act (CEQA) guidelines, according to planning staff.

In addition, opponents would not be able to place the project before local voters as a referendum, since no legislative action would be taken.

If approved, the project would make a large dent on the State's mandate that Santa Monica plan to build 8,895 housing units over the next eight years, more than two-thirds of them affordable.

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