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CC:HA - ACTION ITEM: Discussion of and Direction to the City Manager on the Terms and Conditions of a $16 Million Loan to Community Corporation of Santa Monica for the Jubilo Village Affordable Housing Project.
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Meeting Date: June 9, 2025
Contact Person/Dept.: Jesse Mays - Assistant City Manager
Tevis Barnes - Director of Housing and Human Services
Lisa Soghor - Chief Financial Officer
Phone Number: City Manager’s Office (310) 253-6000
Housing and Human Services (310) 253-5780
Finance Department (310) 253-5865
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Attachments: Yes [X] No []
Public Notification: (E-Mail) Meetings and Agendas - City Council (06/05/2025)
Department Approval: John Nachbar, City Manager (06/04/2025) _____________________________________________________________________
RECOMMENDATION
Staff recommends the City Council and the Culver City Housing Authority (Authority) Board discuss and provide direction to the City Manager/Executive Director on the terms of a $16 million loan commitment to Community Corporation of Santa Monica for the Jubilo Village affordable housing project.
BACKGROUND
Jubilo Village
Jubilo Village is a proposed 100% affordable housing development at 4464 Sepulveda Boulevard that will provide 95 affordable one, two and three-bedroom apartments to at-risk and low-income households. Jubilo will be service-enriched and provide onsite supportive services through a partnership with Upward Bound House, a Culver City local emergency shelter for homeless children and their families. In addition to providing residents with access to resources, Jubilo will also include onsite property management services. Jubilo will be developed in partnership with the property owner, Culver Palms United Methodist Church (“the Church”).
2022 Loan
In 2021, the City approved a commitment to Jubilo of a $2 million construction and permanent loan. In 2022, the City increased its previous loan commitment to $4 million.
In 2023, the City served as a pass through for a $1 million State of California grant facilitated by Assemblymember Isaac Bryan for Jubilo Village.
The terms of the $4 million loan and pass through of the $1 million state grant are established in the April 18, 2024 Commitment Letter (Attachment 1).
2025 Loan
On March 10, 2025 the City Council directed staff to include in the City’s Fiscal Year 2025-2026 budget a $16 million residual receipts loan to Community Corporation of Santa Monica (CCSM) for the Jubilo Village affordable housing project.
The City Manager/Executive Director presented the Proposed Budget for Fiscal Year 2025-2026 at the May 12, 2025 Regular City Council Meeting. On May 19 and 20, the City Council held a meeting during which City staff gave presentations and provided highlights on the Proposed Budget. The budget will be considered for adoption by City Council at the June 9, 2025 City Council Meeting.
The Proposed Budget for Fiscal Year 2025-2026 includes the $4 million loan from the Housing Authority Fund approved in Fiscal Year 2022-2023 and the $16 million loan directed by City Council on March 10, 2025 for a total of $20 million. The first installment of the $16 million loan, in the amount of $4 million, is anticipated to be disbursed in Fiscal Year 2025-2026. The Proposed Budget allocates the first $4 million installment as follows: $2 million from the Housing Authority Fund (Fund 476), $1,557,080 from the Affordable Housing Linkage Fee fund (Fund 439), and $442,920 from the General Fund (Fund 101). $12 million will be moved from the General Fund Contingency Reserve to a Committed General Fund Reserve anticipated to be distributed Fiscal Year 2026-2027.
Staff is now seeking the City Council’s direction on the terms of the loan commitment for the $16 million loan.
Impact of Federal Funding Cuts to HUD
Jubilo’s financial feasibility relies on Culver City Housing Agency’s commitment of 42 Project-Based Vouchers (PBVs). PBVs are funded by the federal government through the Housing and Urban Development Department’s (HUD) Housing Choice Voucher (HCV) program. The president’s latest budget proposal, which was approved by the House of Representatives and is currently being considered by the Senate, cuts HUD’s funding by 40%. If this proposal remains part of the federal budget approved in June or July 2025, it is unclear what will happen to the HCV program, including PBVs.
Currently, there are 69 participants in Culver City’s HCV program. Of the 69 participants, 49 are elderly and/or disabled. Many of them have resided in Culver City for 10 or more years. The current estimated annual cost for vouchers for the 69 participants is $1,237,125. This cost is currently paid for by federal dollars under the HCV program. The 42 PBVs that the Culver City Housing Agency has granted to CCSM are estimated to cost approximately $824,976 per year. Until now, staff expected that HUD would cover this cost through the HCV program. If Culver City’s HCV budget is cut 40% by HUD, the City will not have sufficient federal funding to continue to pay for vouchers for the 69 residents and 42 PBVs.
DISCUSSION
Staff recommends the City use similar terms for the $16 million 2025 loan commitment as the City did for the $4 million 2022 loan. Key loan terms recommended by staff include:
Loan interest rate: 3%, which is the interest rate on the 2022 loan.
Loan Term: 3 years for the construction loan, and 55 years for the permanent loans, which are the loan terms on the 2022 loan.
Disbursement: Disbursement of the $4 million 2025 loan as the project is built and in amounts appropriate to the percentage of construction completed. The City will disburse periodically its loan fund to reimburse CCSM for CCSM’s cost of construction for the affordable housing portion of the project only. The City will not reimburse preconstruction costs, the developer fee, the land lease payment to the Church, or any construction costs for church facilities. All expenditures shall be supported by customary invoices, lien releases, etc. Expenditures must be documented to clearly indicate that the costs submitted for reimbursement are for the affordable housing portion of the project only. At the close of permanent financing, the construction loans will convert to permanent loans, and the City will disburse the remaining $12 million of the 2025 loan as permanent financing. Before disbursement of any loan funds, all loan conditions must be met.
Loan Conditions: Staff recommends conditions prior to disbursement, including but not limited to:
• CCSM has closed on all construction financing loans.
• Full execution of an AHAP agreement for 42 Project-Based Vouchers, including necessary HUD approvals.
• Receipt and approval of a borrower budget which will specify the manner in which the City loan proceeds will be disbursed.
• Receipt of all applicable regulatory approvals and issuance of a City building permit for the project.
• Receipt and approval of all draw requests.
• CCSM’s receipt of construction and permanent financing commitments from LIHTC Equity and Bank Loans in the amounts stated in their project proformas.
• Execution and delivery of standard loan documents.
• CCSM shall defend, hold harmless and indemnify the City and Housing Agency, and its respective officials, officers, employees, agents, and volunteers, from and against any and all claims, including costs, and damages, resulting from a violation (or alleged violation) of law (including, without limitation, state and federal constitutional law) relating to the loan documents or Jubilo Village.
• To the extent that actual project costs are lower than expected, the City’s respective loan amounts may be reduced accordingly so that the minimum necessary public subsidy is provided to the project.
• CCSM shall exercise commercially reasonable efforts to apply for other funding sources, and, if awarded, CCSM shall inform the City, and the City’s loan amount shall be reduced accordingly.
o To address the desire for CCSM to obtain alternate funding.
• Loans will be void if a court determines that the loans are illegal.
Termination: Staff recommends the City have the right to terminate the loan commitment on the occurrence of events including, but not limited to:
• Any funds provided to CCSM by City are used for church (or church-related) construction.
o To address concerns that City funds would be used for church or church-related construction.
• Federal funding to Housing Authority or City for housing vouchers is eliminated or reduced.
o To address concerns that federal housing funding may be significantly reduced or eliminated in the future, as described above.
• CCSM requests from Authority or City additional funds for Jubilo Village.
o To address concerns that CCSM would seek additional City funding for Jubilo Village.
Local Preference: Staff recommends the following local preference requirements:
• Jubilo Village must be leased-up according to the local preference policy of the City of Culver City (which includes priority to persons and families who reside in Culver City), if consistent with federal laws and regulations and the requirements of other awarded funding sources, and in a manner acceptable to the Authority.
o Note that if other awarded funding sources prohibit a local preference, this clause would not require Jubilo Village to have a local preference.
• CCSM shall conduct an affirmative advertising campaign to notify and to educate Culver City residents about how to apply for the upcoming units at Jubilo Village. CCSM’s outreach shall commence at least 120 days prior to the application submission start date and shall include advertising in local newspapers for at least 14 days prior to the application submission date.
• CCSM shall hold at least one community workshop at least 120 days prior to the application submission deadline that provides instructions on how to apply and what documents must be assembled in order to submit an application.
• If Jubilo Village is awarded funding from the Los Angeles County Development Authority (“LACDA”), then CCSM shall work with LACDA to include an application portal on the Culver City website.
• If paper applications are accepted, then CCSM shall insure that such applications are distributed by local Culver City organizations.
• CCSM shall distribute information flyers to the Culver City Unified Schools District (CCUSD), Upward Bound House, Saint Joseph Center, Urban Alchemy, Exodus Recovery Inc. and other local service providers informing the public about Jubilo Village and the application process.
FISCAL ANALYSIS
The Proposed Budget for Fiscal Year 2025-2026 includes the $4 million loan from the Housing Authority Fund approved in Fiscal Year 2022-2023 and the $16 million loan directed by City Council on March 10 for a total of $20 million. The first installment of the $16 million loan, in the amount of $4 million, is anticipated to be disbursed in Fiscal Year 2025-2026. The Proposed Budget allocates the first $4 million installment as follows: $2 million from the Housing Authority Fund (Fund 476), $1,557,080 from the Affordable Housing Linkage Fee fund (Fund 439), and $442,920 from the General Fund (Fund 101). $12 million will be moved from the General Fund Contingency Reserve to a Committed General Fund Reserve anticipated to be distributed Fiscal Year 2026-2027.
Only the $1,557,080 from the Affordable Housing Linkage Fee fund is restricted to be used for affordable housing. The $12,442,920 from the General Fund has no restrictions. The $6 million from the Housing Authority Fund depletes that fund. Now programs historically paid by the Housing Authority Fund including the City’s Rental Assistance Program (RAP), Mortgage Assistance Program (MAP), Upward Bound House services and other homeless outreach, will have to be funded by the General Fund.
ATTACHMENTS
1. 2025-06-09 ATT 2022 Loan Commitment Letter to CCSM
MOTION(S)
That the City Council and Housing Authority Board:
1. Discuss and provide direction to the City Manager/Executive Director on the terms and conditions of a $16 Million loan to Community Corporation of Santa Monica for the Jubilo Village Affordable Housing Project; and
2. Authorize the City Attorney/Housing Authority General Counsel to review/prepare any necessary documents; and
3. Authorize the City Manager/Executive Director to execute such documents on behalf of the City/Authority.