Los Angeles County Development Authority Loan Program

Since 1999, HR&A has provided on-call affordable housing advisory services to the CDA and the County’s Housing Authority, and since 2007, to the Department of Mental Health.

Challenge

The County of Los Angeles administers several loan programs to fund permanent supportive and other forms of affordable housing located in cities and unincorporated areas throughout the County. These include an annual Notice of Funding Availability (NOFA) program administered by the Community Development Authority (CDA), originally using litigation settlement funds derived from the former City of Industry redevelopment project area, and later, allocations from the County General Fund and other sources. The CDA requires technical assistance to review and evaluate non-profit developer loan applications for allocations of available funds. In 2007, the Los Angeles County Department of Mental Health was awarded an initial $116 million allocation from the Mental Health Services Act (MHSA), a voter-approved initiative charged with expanding mental health services in the state of California. Among its many initiatives the Act allocated funding to each county to provide pre-development, permanent financing, and capitalized operating subsidies for new, permanent supportive housing for persons with serious mental illness who are homeless or at risk of homelessness. But the County’s Department of Mental Health lacked expertise to design and implement the program and evaluate applications for use of its funds.

Solution

HR&A has supported implementation of the CDA’s NOFA loan program by reviewing and scoring dozens of detailed competitive developer proposals, and for some projects awarded funding, conducting due diligence reviews, assisting applicants and County staff to finalize deal structures, drafting complex loan documents and providing other program implementation services, including project financing review, loan evaluation, and loan underwriting. For the County’s MHSA Housing Program, HR&A assisted staff to design all program operating and administrative procedures and NOFAs, evaluated applications from non-profit developers, and performed more detailed financial reviews for applications selected for funding.

 

IMPACT

Through HR&A’s work for the CDA, more than 100 projects have received funding from the its programs, which has been critical to securing federal low-income tax credits to complete the capital stack needed for total project financing. For the MHSA Housing Program, about $138 million has been committed to 52 affordable housing developments to date, with most of the projects either completed or under construction. Projects selected for funding will leverage over $400 million from other sources to produce about 2,500 units of affordable housing, of which 1,118 are targeted to MSHA Housing Program clients. Under both County programs new permanent supportive affordable housing, targeted to a range of populations – including seniors, families, and transitional-age youth – will be developed in all five Supervisorial Districts and nearly all of the County’s eight mental health services areas.

Creating a Racial Equity Agenda for the United States Conference of Mayors

The United States Conference of Mayors developed a comprehensive understanding of the programs, policies, and projects that are effectively advancing racial equity across the country.

CHALLENGE

Across the country, discriminatory policies and practices have created lasting disparities in social and economic outcomes across races. To work against this harmful legacy, the United States Conference of Mayors, with its strong tradition of leadership on issues of civil rights and social justice, is using its national platform to help mayors and cities understand and implement the policies and practices that can reduce racial inequities in cities.
 
The organization engaged HR&A to survey existing racial equity programs in cities and create a set of recommendations for how it could help member cities proactively make meaningful change in their policies and practices.

Solution

To understand their most pressing challenges, we interviewed mayors and staff from 13 cities. The collective feedback showed that some cities are incorporating racial equity through place-based initiatives, programmatic initiatives, and policy change. Additionally, cities are seeking help from external partners to directly address race in their communities. We learned the importance of mayoral leadership and that clear definitions of equity are needed to translate commitments into practice. Synthesizing our findings, we outlined the ways that the U.S. Conference of Mayors could serve as an important convener for mayors and a source of best practice and technical assistance.
 
Our deepest insight emerged from our conversations with economic development departments. Unlike many social services, these functions are siloed from conversations on racial disparity even though they are charged with decisions that impact the physical, demographic, and economic realities of communities. This insight helped us design a program that would connect these departments with training, resources, and technical assistance to embed equity into daily practice.
 

READ THE BRIEF

Joint Development Guidelines for Crenshaw/LAX Light Rail Corridor

LA Metro is supporting the economic and physical development of Los Angeles communities through its Transit-Oriented Communities Program.

CHALLENGE

In 2008, Los Angeles County voters showed their overwhelming support for Measure R, which solidified a groundbreaking plan to double the length of the commuter rail system by 2035. To ensure that this major investment in the rail network produces wide-ranging benefits in the communities that it serves, the Los Angeles County Metropolitan Transportation Authority (Metro) launched the Transit-Oriented Communities Demonstration Program, a comprehensive approach to facilitating joint-development on the land it owns around transit stations.
 
As part of the program’s implementation, Metro engaged HR&A to support the development of program and design guidelines that incorporate broad community objectives – like community development, economic development, and multi-modal mobility – into joint development projects along the Crenshaw/LAX light rail corridor.

Solution

To define the appropriate scale and character of supportable development at each station area, HR&A analyzed market demand for key land uses at each station and tested the financial feasibility of potential development scenarios through pro forma financial modeling. Our financial feasibility testing placed a significant emphasis on potential opportunities that would likely result with the introduction of rail transit.
 
Also, to incorporate community input and feedback, HR&A attended and facilitated a series of community stakeholder meetings at each station area.
 
After using HR&A’s recommendations to develop overarching vision and design guidelines, Metro issued final development guidelines for the Fairview Heights and Expo/Crenshaw station areas in June 2016.
 

IMPACT

Building upon the development guidelines, Metro issued a Request for Proposals for a joint-development opportunity at the Expo/Crenshaw Station and selected a subsidiary of Watt Companies, a nationally recognized real estate investment and development firm, for a six-month exclusive negotiation agreement.
 
The Watt Companies’ initial proposal included many of the program elements recommended by HR&A – affordable housing for residents at the very low-income level, nearly 50,000 square feet of community-serving space, as well as retail spaces targeting locally-owned businesses.

Capacity Building for the National Disaster Resilience Competition

The National Disaster Resilience Competition institutionalized the practice of resilience in cities across the country.

CHALLENGE

To confront increasing physical vulnerability to the effects of climate change and decreasing public funding available for infrastructure and community development, the U.S. Department of Housing and Urban Development (HUD) and the Rockefeller Foundation partnered to transform resilience building policy and practice through the National Disaster Resilience Competition. In 2014, President Obama allocated $1 billion in HUD funding to competition winners, which were selected from places that suffered presidentially-declared disasters between 2011 and 2013.

Solution

HR&A supported the Rockefeller Foundation’s management of the program, providing technical support for 67 cities, states, and counties as each prepared competition submissions. This work ensured that the projects and programs would respond to a broad array of climate-related risk, and address social, economic and environmental challenges. HR&A also designed and delivered a capacity-building program for participants that provided individual technical support to teams to guide them through proposal development; regional “Resilience Academies” that brought together a network of experts to support teams in assessing risk and developing strategies and projects to address them; and tools and other resources to help interpret HUD guidance.
 

IMPACT

The competition enhanced local, state, and regional resilience techniques by offering resources and encouraging partnerships to amplify potential financial and social benefits activated by federal funds. In 2016, HUD announced the 13 winning cities, states, and counties of the $1 billion competition. Funded projects include state watershed, coastal protection, community flood grant, and public housing resilience pilot programs; and coastal wetland and rural river resilience efforts among other projects.
Following the awards, the Rockefeller Foundation engaged HR&A to incorporate workshop teachings into a permanent resilience curriculum, which was deployed across the world through the Global Resilience Academy.

Solicitation & Transaction Management for the Salesforce Transit Center

The Transbay Joint Powers Authority successfully procured a facility management and programming partner for the $2.26 billion Salesforce Transit Center.

CHALLENGE

The Transbay Joint Powers Authority was established to design, build, operate, and maintain the world-class Salesforce Transit Center in downtown San Francisco. Intent on maintaining its compact team and clear focus on transit, the Authority sought a private-sector partner to manage the facility’s 90,000 square feet of commercial and retail space, rooftop park, robust public art program, and significant digital advertising assets.
 
The Authority’s leadership engaged HR&A to identify the appropriate public-private partnership structure and solicitation process that would attract the right partner for this iconic piece of American infrastructure.

Solution

Working closely with the Authority’s leadership, the team defined a set of principles for a public-private partnership structure that would enable the Authority to maintain ownership of the transit center, generate an economic return, retain oversight of center operations, minimize risk associated with operations and maintenance of the non-transit program, and most importantly – provide a world class experience for the 50,000 daily riders, workers, and shoppers who will visit the transit center.
 
With these principles in place, HR&A drafted and released a solicitation, and marketed the opportunity to local and national real estate development, facilities, open space, and digital media management firms. The team guided the Authority’s evaluation committee through the respondent review, interview, and selection of the preferred asset management team.
 
To ensure the agreement terms incentivized performance and a timely ramp-up to stabilization of operations, HR&A worked with the Authority’s legal counsel through negotiations.
 

IMPACT

After attracting a number of strong proposals and selecting a preferred asset manager, the Transbay Joint Powers Authority executed an asset management agreement meeting all of its criteria with an interdisciplinary team led by Lincoln Property Company.
 

Defining the Economic Impact of WeWork

Challenge

As part of an initiative to shape the future of work and cities, WeWork was interested in demonstrating how the WeWork community creates an economic ripple effect for people, businesses, neighborhoods, and cities.

Solution

To quantify the economic benefits of WeWork to a range of stakeholders interested the company’s growth, HR&A developed the first detailed economic and fiscal impact analysis of WeWork communities in New York City, Los Angeles, and Chicago. The analysis focused on WeWork’s value-add to each partner and its crucial role in growing each city’s innovation economy, small business sector, and entrepreneurial community. HR&A built on this by assessing neighborhood-level demographics and market trends, and creating illustrative profiles of WeWork’s members. Finally, HR&A developed projections to estimate how WeWork’s expansion could impact other cities across the U.S.
 
 

IMPACT

Our study found that WeWork would be among the largest private-sector employers in New York City, Los Angeles and Chicago, supporting 50,000 jobs across the three cities. For each member, one additional job is created somewhere else where in the city, in total representing nearly 1% of each city’s workforce. A subsequent report, WeWork’s Global Impact Report 2019, expanded to track impacts the impacts of the company worldwide. Findings from both studies will be incorporated into WeWork’s Future of Work initiative and will continue to support outreach to policymakers as WeWork expands.

Los Angeles Economic Development Framework

HR&A worked with the City Administrative Officer and Chief Legislative Analyst of the City of Los Angeles to evaluate and recommend a new approach to citywide economic development.

Following the recent dissolution of Community Redevelopment Agencies throughout California and the lingering effects of the 2007-2009 Great Recession, the Los Angeles City Council voted unanimously in support of a new framework for the City’s economic development structure. HR&A prepared this framework with the following recommendations for a new public-private structure to deliver economic development services:

  • A new Economic Development Department to support the City’s businesses, industries, and communities; direct production of a citywide economic development strategy; manage and facilitate the distribution of federal and state resources; and consolidate certain economic development functions from existing City entities, including workforce development.
  • A new independent Citywide Economic Development Nonprofit partner, operating under contract with the City, to manage the City’s strategic real estate assets; advance major economic development and public-private real estate projects; manage the City’s off-budget finance entities; and provide expert research, analytic, and transaction negotiation services.
  • A Deputy Mayor for Economic Development charged with ensuring coordination among the Mayor’s office, the economic development department , the independent economic development non-profit, other related City departments, proprietary agencies, and external economic development stakeholders.

This new framework will provide the organizational platform required for the City to create new jobs, attract new businesses and industries, maintain global competitiveness in the 21st Century, and grow its tax base.

The report’s recommendations are based on the HR&A team’s analysis, which was completed in three months of intensive work. The analysis included interviews with more than 80 key stakeholders, including executives and staff from the Mayor’s office, City Council, City departments, proprietary City agencies, nonprofit and community-based organizations, and private industry leaders; an online survey distributed to more than 160 economic local development entities; detailed organizational reviews of 19 City departments and proprietary agencies; and in-depth case studies of economic development organizational models employed in eight other U.S. cities.

To date, the City Council has approved formation of, and allocated the inaugural-year budget for, a new Economic and Workforce Development Department, and Mayor Eric Garcetti appointed a new Deputy Mayor for Economic Development in 2013.

Image Courtesy: Historic Core of Downtown Los Angeles

100 Resilient Cities Logo

100 Resilient Cities Challenge

HR&A is supporting urban leaders in 100 cities across the United States as they develop comprehensive, actionable plans to become more resilient to social, economic, and physical risks and challenges.

HR&A supports the 100 Resilient Cities program, a global initiative pioneered by The Rockefeller Foundation, and Chief Resilience Officers across the United States as they develop comprehensive resilience strategies and implementation plans that respond to their cities’ unique set of risks and long-term vision and goals. Each strategy and implementation plan is designed to build the capacity of individuals, communities, institutions, businesses, and systems within a city to not only survive a major disruption event such as an earthquake or flood, but also to adapt and grow in the face of chronic stresses such as poverty or housing availability.

HR&A works with each Chief Resilience Officer and other senior officials to develop comprehensive resilience strategies.

At the forefront of Resilience Strategy Development, HR&A has supported the comprehensive strategic plans for Norfolk, New York City and New Orleans – the first to be delivered as a part of the 100RC program.  In Norfolk, HR&A worked with the Chief Resilience Officer (CRO) to design initiatives that will make the coastal city more prepared for climate change, create economic opportunity in new and growing sectors, and strengthen communities and neighborhoods while deconcentrating poverty. New York City’s strategy, developed with support from HR&A, envisions a more resilient city embracing balanced growth, a more inclusive economy, sustainability in the face of climate change, and more resilient infrastructure and services. In New Orleans, HR&A supported the CRO in prioritizing initiatives advancing coastal protection and restoration, creating equity through opportunity, and redesigning regional transit systems. Future strategies may include the development of high priority implementable projects and initiatives that strengthen infrastructure, generate economic opportunity, improve governance structures, and build social capital.

 

Through the Resilience Strategy Development process, HR&A supports cities and CROs to:

  • Identify and prioritize potential acute shocks and chronic stresses that their cities face;
  • Provide thought leadership by guiding use of best practices and delivering data-driven analyses;
  • Coordinate and facilitate stakeholder workshops; and
  • Design a Phase-1 Resilience Strategy

 

HR&A led agenda-setting workshops for six of the ten selected North American cities: Los Angeles, California; Norfolk, Virginia; Boston, Massachusetts; Boulder, Colorado; Tulsa, Oklahoma; St. Louis, Missouri; and El Paso, Texas. Prior to each workshop, HR&A analyzed the city context, including demographic, economic, social, and physical metrics, to define a city-specific strategic plan. Learn more about the program at 100resilientcities.org

NBCUniversal Economic Analysis

NBC Universal Evolution Plan

HR&A provided detailed economic analysis for NBC Universal’s entertainment and studio complex expansion plan.

HR&A analyzed population, housing, public school enrollment, employment, economic and fiscal impacts of a proposed $1.6 billion Specific Plan that will increase the intensity of development at Universal City. The project site is the home of NBC Universal’s 400-acre film studio, studio tour, entertainment retail, commercial office and hotel complex. HR&A’s analyses were included in the Environmental Impact Report on the project.

The project is located in an unincorporated area of Los Angeles County, but also includes areas that are in the City of Los Angeles. Some areas may be annexed to or detached from each jurisdiction, which required rigorous attention to measuring impacts by jurisdiction under multiple development scenarios.

 

All project entitlements, except for the minor jurisdictional annexations/detachments have now been approved by both the City of Los Angeles and the County of Los Angeles.

 

HR&A also prepared similar impact analyses for the Walt Disney Company’s multi-billion dollar expansion of Disneyland in the City of Anaheim, 20th Century Fox’s expansion of its facilities in Century City, and a new pending master plan for Paramount Pictures Corporation in Hollywood.

Los Angeles Homeless Housing Program

HR&A worked with the Los Angeles County Department of Mental Health to design and implement the County’s Mental Health Services Act Housing Program.

The Mental Health Services Act Housing Program is a voter-approved initiative charged with expanding mental health services in the state of California. Among its many initiatives is a funding allocation to each county to provide pre-development, permanent financing, and capitalized operating subsidies for new, permanent supportive housing for persons with serious mental illness who are homeless or at risk of homelessness.

Through HR&A’s work, $111.9 million has been committed to 30 affordable housing developments to date, with half the projects either completed or under construction.

Projects selected for funding will leverage another $408.0 million from other sources to produce 1,375 units of affordable housing, of which 716 are targeted to MSHA Housing Program clients. New permanent supportive affordable housing, targeted to a range of populations – including seniors, families, and transitional-age youth – will be developed in all five Supervisorial Districts and nearly all of the County’s eight mental health services areas.

Since 2007, HR&A has worked with Department of Mental Health to:

Plan the Los Angeles County MHSA Housing Program,

Design the local project application review process,

Review Letters of Interest from affordable housing developers for consistency with adopted funding priorities,

Review the financial feasibility of individual projects,

Respond to project financing issues raised by the California Housing Finance Agency (the loan underwriter),

Improve coordination among local public affordable housing funders, and

Trouble-shoot issues as they arise during the the complex process each developer undertakes to package the necessary project financing.

The program’s administrative process has improved coordination of resources, and maximized funding availability from multiple County affordable housing programs and programs administered by other local public funders, which includes the Community Redevelopment Agency of the City of Los Angeles, the Los Angeles Housing Department and the Housing Authority of the City of Los Angeles.