>> Good morning, everyone. If I
could ask everyone
to please take a seat. It is
11:00 AM and we want
to start this meeting
on time.
And I want to welcome back
everyone. All right.
So, I will call the regular
Executive Management Committee
meeting to order. I am serving
as the chair
of today's meeting in place
of Mayor Bass. Board Clerk,
will you please call the roll
to establish a quorum?
>> Vice Chair Barger is absent
today.
Director DuPont Walker.
>> Here.
>> Director Solis.
>> Here.
>> Chair Bass will be absent
today. Caltrans
Representative Roberts.
>> Here.
>> And sitting in for Chair
Bass, we will have Chair
Sandoval.
>> Thank you.
>> Quorum is present.
>> Very good. Alrighty, I'm
going to turn it over to
Deanna to read public comment
instructions.
>> To give public comment,
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>> Thank you, Deanna. Okay,
let's go ahead and start
with the consent calendar. Do
any board members,
committee members wish
to pull an item from consent?
Okay, not seeing any. Deanna,
can you check
to see if we have any speakers
on consent calendar items?
>> None in the room,
but if you're on the phone,
please press pound 2 if you'd
like to make a comment
under consent calendar items
31, 32, and 33.
No public comments.
>> Okay, can I get a motion
to approve?
All righty. Second.
Got a first, a second. not
hearing any opposition,
the motion passes. Okay, let's
go ahead and move on to item
34, which is state and federal
report. Just for committee
members and the public,
we do have 3 non-consent items
for consideration. Welcome.
>> Good morning, Mr. Chair and
members. Michael Turner with
Government Relations. And this
chair is temporarily empty
because Raffi is checking
on something that was happening
on the House floor this
morning. So, he'll be right
down. But Madeline will give us
an update on state issues. And
mainly there's a lot
of discussion
about the CAPITA Invest program
and really the collapsing
of revenues that was created
by CARB's recent ruling. And
then the Olympics continues
to be a big issue for us, both
in Washington and Sacramento,
and we'll talk about both
of those.
>> All right, thank you. We're
going to go a little out
of order, and I'm going
to start
with our state update. So,
since we last met, the
California Air Resources Board
voted to advance regulations
that will essentially defund
the Tier 3 investment
in the new Cap and Invest
program. Tier 3 investments
include Greenhouse Gas
Reduction Fund-funded transit
and intercity rail capital
programs for $400 million
statewide annually, and the
Low Carbon Transit Operations
program for $200 million
statewide of annual funding.
Metro stands to lose $50
million a year
in LC TOP funding alone,
which we use
for critical operations.
Though Metro and a large
coalition of transit,
affordable housing, clean air,
and other Tier 3 recipients
turned out to the late May
hearing to urge the CARB board
to oppose these regulations,
we were not successful. We are
aware of litigation related
to this vote already.
Communities for a Better
Environment say CARB failed
to fully study changes meant
to ease pressure on oil
refineries and other industries
before taking a final vote.
The next joint
California-Quebec auction is
scheduled for August 19th,
2026. According to CARB, most
of the new changes
to the market are scheduled
to go into effect September
1st. Now, moving on
to the budget, the governor
formally signed the FY 26-27
budget on June 29th. The final
budget deal is very similar
to the May revision that we
previously reported on. The
budget deal does not address
the funding issues associated
with the greenhouse gas
reduction fund that have arisen
following the CARB vote. The
final budget additionally does
not include any funding related
to Metro's $379 million
transportation infrastructure
ask for the 2028 Olympic and
Paralympic Games, though it
does contain provisions related
to the games route network that
will be conducted that were
conducted in collaboration
with Caltrans. In early July,
the state announced that
preliminary data from
California tax agencies showed
income tax Data from April
through June exceeding the
estimates of the May revision
by $1.3 billion. While this is
welcome news overall
to the state budget, just to
note that this increased
revenue will primarily go to
funding schools and community
colleges. As far as next steps,
additional budget trailer bills
are expected when they
reconvene in August, and Metro
has used this recess
to continue to advocate
for the inclusion of games
funding and the restoration
of critical transit funding.
Then head
to a legislative update. As I
mentioned,
the legislature is currently
in summer recess and will
return for its final month
of session on August 2nd.
Happy to report that on July
1st, Senator Durazo's SB 1361
passed the Assembly Local
Government Committee on a vote
of 8 to 1 with 1 abstention. SB
1361 limits cities' ability
to take certain actions
against transit projects
on the basis of opposition to
increased density requirements
in 2025's SB 79. This
action those these actions
include requesting that a
transit agency reduce service
to a stop so that the bill
would not apply. The bill now
moves to consideration
in the full assembly.
Additionally,
in other good news, AB 1837
by Assemblymember Mark
Gonzalez passed its final
Policy Committee vote. The
members of the Senate
Privacy, Digital Technology,
and Consumer Protection
Committee voted 7 to 2
to advance the bill
to the full Senate. This bill
would extend the sunset
to 2032-2034
for transit agencies
to use front-facing cameras
on buses
to capture parking violations
in bus-only lanes. With that,
happy
to take any questions or turn
it over to my colleague,
Raffi.
>> Let's go ahead and have the
full presentation and ask my
colleagues
to hold their questions until
you finish the presentation.
Okay. Thank you.
>> Chair Sandoval, members
of the committee, Raffi
Amprayan, Federal Affairs, LA
Metro. Happy to give a quick
federal update. Probably 3
primary issues that merit,
discussion today. The first is
remarkably timely,
and that is it appears the
House of Representatives is
moving in the direction of
adopting a continuing
resolution for our purposes,
that is relevant because,
we have a number
of equities pending in a
transportation spending bill,
in the House, and it would
appear that, there will be,
no successful effort to try
to get that adopted
by the beginning
of the federal fiscal year,
September 1st. In, shorthand,
I would say basically what
Congress would be doing and
this is sort of the House
perspective,
and it hasn't been shared
by the Senate yet they'd be
kicking the can
down the road, till after the
November election and dealing
with what some would
characterize as a, a bit
of a, a mess
of all these spending bills
after Election Day. So, that
it's significant. We had,
a number of funding priorities
in the fiscal year '27 bill,
including $875 million
for the Olympic Games, and a
number of other issues,
and it appears that as
of this morning, the House is
going to seek to kick that can
down the road. That's
significant
for another reason,
because if they're going
to do that,
that means there's only about
20 days, 20 legislative days,
until Congress breaks for the
November recess and the
elections. And the second
matter I want to raise
to the, to the board is the
fact that this means the
reauthorization of America's
Surface Transportation Bill,
which was the Bipartisan
Infrastructure Law, appears
like that's not going to
happen. That's significant
because with the expiration
of the Bipartisan
Infrastructure Law, you lose
the, the funding that was in
Title J of the BIL, which was
the advance appropriations.
So, Congress will now have
to decide in what shape and
manner they're going
to reauthorize for a short
period this authorization bill.
It's a complicated matter.
There are some stakeholders who
believe we should have a
short-term authorization
extension to put pressure on
Congress to get a long-term
bill passed. Somewhere
in the vicinity of 5 to 6
years. And there are others who
are concerned that Congress
appears not able to deal
with these things in the short
term and that there should be a
long-term authorization
of the legislation. And so that
we don't get into a herky-jerky
perspective where every 2 to 3
months we don't know if the
formula funding is coming. We
don't know what discretionary
grant programs are happening.
It's, it's not a terribly rosy
scenario for us. I think we've
got a great planning department
and they're taking a look
at what the impacts would be
of a short-term extension
over a long-term extension.
So, that's the second impact
and sort
of collateral damage, Chair
Sandoval, of what occurs when
the continuing resolution is
adopted. You're now going
to be looking at an extension
of the Surface Transportation
Authorization Bill. And the
last matter I'd like to raise
which is a subject that our CEO
has sent
out legislative alerts
on and we've talked about
to the board previously.
But I want
to make sure that it's clear
in everyone's minds the impact
of this. The Office of
Management and Budget on May
29th issued a proposed rule
which would substantially
change the manner in which
federal grants are given,
not just
to transportation agencies,
but across the whole
of government, approximately
$1 trillion annually, and it
includes having grants cleared
by, political appointees. It
includes the ability
to cease a grant, midstream
should that grant be deemed not
in the, not part of the
executive branch's priorities.
And so, for us, as one example,
and then I'll conclude a
good example would be a CIG
project. You have a major
project that is funded
over a 10-year process,
say it's $1 billion. This would
give the federal government the
ability to, halfway
through the grant, to say,
we have found reason not to
continue this grant and we're
going to cease giving you,
allocations based on this grant
because we found A, B, and C.
As you can imagine,
for any entity that is building
large infrastructure
projects. That's highly
disruptive. And the a great
indicator of this was that
Moody's, the rating
agency, put out a statement and
said the adoption
of these proposed rules would,
in their estimation, lead
to a downgrade
in the rating of,
transportation entities that
are in consistent receipt
of federal grants. So, I'll
conclude there. Appropriations
authorization and the OMB
proposed guidance,
which is expected to be put
into force on October 1st.
>> Raffi, do you have any bad
news for us?
>> Yeah, it's been, yeah,
not the greatest news today.
>> Before we take comments,
I'm out of line here. We have
one other presentation. No,
that's it. Oh, okay, good.
Let's see if we have any
speakers on this item, and if
not, I'll turn it over
to we'll start with,
committee member Dupont
Walker. But let's see if we
have any members
of the public who wish
to speak.
>> This is public comment
for item 34. Please press pound
2 if you'd like
to make a comment on item 34.
Please unmute the caller. We
have one caller.
Silas, can you
unmute 3784, please?
>> Please stand by. I'm trying
to unmute them now. There we
go. Caller ending in 378. One
minute
to state your comment.
>> We didn't want
to hear that. So, you have all
these the new state stuff,
which give reduced local
control and allow and prevent
cities from stopping transit
projects and such. So, I'm
expecting we'll probably see a
vote against that from the
Metro Board at some point, even
though it actually helps
transit projects. But, you
know, it's very notable how you
all keep so many
of the members of this board in
their particular elected
capacities and their local
governments keep trying
to kiss up to the Trump
administration, and yet they're
still not giving you anything.
So, why are you trying
to kiss up to them? So let's
stop trying to appease Trump.
Let's stop failing
to do anything
to protect your residents
from ICE. Let I don't even know
where Bass is. She better have
a good excuse for missing her
first meeting as chair.
But she needs to fire
McDonnell. Let's start actually
standing up
to the federal government since
they're clearly not giving you
stuff in.
>> That was the last public
comment.
>> Okay. I'm going to go with
Director Dupont-Walker and then
Director Solis.
>> Thank you, Mr. Chair, and
thank you for the presentation.
I know that your diligence is
something we can have
confidence in, and our CEO's
focus and vision is something
that we count on. I just need
to understand the process
after a rule is proposed,
because the news seems
to report that
without outcome,
without possibility
of change. Is there any kind of
overruling that can happen? I
just need
to understand simply,
and if it's too long today,
I'll take a tutorial later.
>> Well, there's generally 2
tracks. One I would defer
to our legal expert on,
which is that the,
the full expectation that this,
proposed rule change,
will be challenged
in the courts, number one. And
number two, and I'm looking
at we have a former member of
Congress here, the,
many members of Congress,
including a, a vast majority
of Democrats, are deeply
opposed, to this rule change.
And I can expect, whether it's
in the coming weeks and months,
or whether it's the beginning
of a new 120th Congress, there
will be determined efforts
by the legislative branch to,
overrule this change being
proposed by the Office of
Management and Budget. So,
on the legal, I would defer
to the legal expert, but
on the, on the federal end
of the legislative, I do
believe that there will be
efforts by members of Congress
to enact a law to bar this
proposed rule change.
>> Thank you, Mr. Chair.
>> Thank you.
>> Director Solis?
>> I concur, Raffi. When we
started, you were
in the back room,
and maybe you should have
stayed there, no? Because it's
all bad news. But no, thank
you, because both, you know,
all of you, you know,
you guys have been doing great
work, and obviously, It's not
good, not good messaging and
things that have been going on.
Even yesterday
in our planning committee,
we talked about this. And I
know that, Holly Mitchell, our
also director,
is keenly aware that
for the state side,
there can be work done
between now and then on the
trailer bills and getting our
delegation engaged.
So whatever appropriately,
appropriately is needed,
I'm sure we will get our ducks
in order and start doing that?
Because that's going
to be soon upon us, right?
>> Yes, thank you, Director.
And I, I would also add that
this was a priority. Our $379
million ask was a priority
of our LA County delegation.
They are fully engaged,
fully committed. We've been
speaking to key members,
leadership,
and budget staff these past few
days, even though it's recess,
to really hit the ground
running when they return in
August. with the hopes that we
can secure. We've been very
clear that we need the funding
this session, that this is not
something that they can kick
the can down the road for
in order to have time
to complete the projects.
>> So we'll be sending some
written as well as calling and
visiting or whatever?
Yes. All of that.
Okay, and
on the federal side, well, OMB,
let's wait and see what happens
after November. 'Cause I'm
certain that there are counties
and other states and members
and other localities that are
also gonna be challenging the
rule. I know we are
at the county doing that too,
because it will create havoc.
And I'm glad you pointed out
Moody's rating, credit rating,
because that also will
devastate and fracture a lot
of our budgeting and our
ability to get loans, right?
To support everything that
we're doing. So, it's tragic.
Thank you for your work. We
remain committed, right? So,
thank you.
>> Thank you. Thank you,
Director. Raffi, you said a
lot. And I think that
for the public, they don't
always know necessarily what
the implications are. What does
it actually mean
to riders when you talk
about a proposed rule change?
Can you just elaborate a little
bit on what that actually means
for the agency and
for our riders, because
they have an important role
to play in terms of pushing
their congressional members
to speak
on their behalf as it relates
to the change. So, can you
comment on that?
>> I think one of the thank
you, Chair Sandoval,
for the question. One
of the genuine success stories
of this agency
over the past couple of decades
is that we have an exquisite,
very productive,
very effective relationship
between the local community and
taxpayers, the state of
California, and the federal
government what some would
refer to as a 3-legged stool.
And we've been able
to use that 3-legged stool
to advance mobility across LA
County by building projects
both small, medium-sized and
big. I think for the
LA County resident who
would be introduced
to this subject
for the first time, I would
share that this proposed rule
might put us in a position
of taking away one of the legs
of the stool. And you can
imagine the result that would
occur when you take one leg
away. And so the fine and I
think brilliant example I gave
was with,
a full funding grant agreement.
There's a Schedule 6 in the
full funding grant agreement
which says we're going
to give you, let's say $100
million over a 6-year period.
If you're 3 years in and
for some reason, whether
whatever the administration is,
a decision is made
to halt that funding,
you're left with nothing. In
effect half a transit project,
or, not in our business because
we don't build bridges,
but we'd be left
with half a bridge. And it,
it's not a way, to construct
infrastructure because we need
to complete our projects and
get our,
our whether it's our rail
lines, our BRT,
whatever project we have,
they need to go from point A to
point be and not halfway there.
So, it's, as
Director Solis said,
it's raised a lot
of concerns. I think the
Moody's announcement, you know,
the, the business and corporate
community is also concerned
because the impact this could
have on,
the finances that drive a lot
of the construction
of these projects.
>> And Mr. Chair, I would like
to actually expand
beyond the rule
to connect the dots about some
of the things Raffi's referring
to because In the
reauthorization bill is where
the authorized funding levels
for the Capital Investment
Grant Program are established.
That's the main source of how
we fund our big projects. We
have the Southeast Gateway
Line that's waiting
to get in, into engineering,
which could then become
eligible for funding. We have
the Eastside extension
of the, what used
to be called the Gold Line,
that would be our one
of our next priorities. And
then we're trying to line up
Sepulveda to ultimately get
in that queue. There's also
funding that comes
from that bill that goes
to the state,
and then those things flow
down into local projects. So,
if that authorization ceases,
Caltrans then will could
potentially have financial
trouble in funding projects,
shop projects, things
like that. At the state,
I'm taking Raffi's gloom and
making it gloomier.
At the state, we just saw CARB
eliminate funding for 2 public
transit programs. One is the
Transit and Intercity Rail
Capital Program. That's where
we that's the one source
of state funding
for transit capital projects.
There's some money that comes
from SB 1, the sales, the
sales tax increase we did that
goes into that.
But that's a big chunk
of funding that we have used
for our capital projects. The
other thing that action did,
it eliminates funding for one
of the sources
of operating funds
for our transit programs,
about $50 million
for the county. Madeline?
>> Yes, for the county.
>> And so, you know,
this is basically what we're up
against, right? We've got a
threat
against the capital programs.
There's also the,
the transit programs The
formula programs are also
authorized in that. Oh, sorry,
I got those separately. And
then at the state,
we've got the threats to the
TIRCP and the LC TOP program.
So, rough waters ahead.
>> Yeah, it would be
catastrophic for our ongoing
and future projects. I would
just ask for future
presentations if you could at
least bring us one positive and
good, even if it's small.
>> I had good news about the
legislation progressing.
>> Very good, very good.
Okay, not seeing any other
directors who wish to speak.
This is a receiving file. Thank
you so much. We can go and move
on to item 35, Homeless
Outreach Management and
Engagement Quarterly Report.
Do my colleagues want a
presentation on this item? Do
you want a presentation
on this item? No?
Okay. You can certainly sit and
just in case questions come up,
but not in need of a
presentation. I will go ahead
and turn it over to Deanna
to see if we have any speakers
on this item.
>> This is public comment
for item 35. Please press pound
2 if you'd like
to make a comment on item 35.
We have one caller. Please
unmute 3784.
>> Caller ending in 3784,
please state your name. You
have one minute
to state your comment.
>> Hello?
>> I think he's, that was the
last I guess public comment.
>> Very good, very good,
very good. Do any of my
colleagues have any questions?
Uh, yes.
>> Just briefly, I just want
to say thank you
for your work and thank you
for continuing to work
with the County Department of
Mental Health
with the teams and all
of that. And I'm really happy
because every time you do
present, it's always good,
good news. Just one concern
end of the line,
and continuing to see how we
can get our COGS more involved
because they do receive
funding,
special funding and allocations
through Measure A and also
through trust funds that come
down from Sacramento
for housing and all that. And I
really think it would be
worthwhile
to have members talk,
those that are part of the COGS
also. let our COGs know how
important it is for them to
also stand up interim housing
and opportunities like that.
'Cause I think that people are
losing sight
of it and I'm hearing some of
that and it's really concerning
because we don't need
to be faced with that. We
should be all
in this together. So, whatever
we can do, not just your staff
'cause I know you're all
out there, but maybe that's
something that this,
this board can do as well.
So, just wanted
to say that.
>> Well said, Director Solis.
Director Dupont-Walker.
>> Thank you, Mr. Chair. I want
to join, Supervisor Solis
in saying thank you. During,
FIFA, when I was ear hustling,
I heard so many local people
talk about being back on public
transit and seeing the
ambassadors and seeing the
attention
to some persons who were
on the trains. For the buses, I
think there's also a very
wonderful and welcome
atmosphere. I even heard we
even had some black shirts
occasionally on there. So,
thank you for continuing
to do that, especially
for the residents of the county
who have no choice,
that we are able
to offer them an opportunity
to be housed. Thank you, Mr.
Chair.
>> Thank you, Director. I do
have a, a question, and it,
relates back to comments made
by Director Solis. I know that,
we could always use more
interim beds. I know in the
City of Pomona, we have I
believe we provide 5 interim.
just, just
for full transparency,
between The A-line
from downtown Union Station
to Pomona. How many other
cities are providing interim
beds? Do you have that number?
>> In partnership with Metro?
>> Correct.
>> Unfortunately, we just lost
25 that we had in partnership
with LASA and the county, one
of the shelters, Welcome
Navigation Shelter, that is
located pretty close
to the proximity of Union
Station, had to close due
to funding. A lot
of that funding was LASA,
and as you know, a lot of the
funding that LASA had went
to the new department
in the county.
Through that process,
they were unable
to keep the shelter open,
and therefore those 25 of 80
beds that that shelter had,
we were utilizing
for end-of-line assistance,
is no longer available.
>> So, because
of that decision,
there are real consequences to
the efforts that we've
undertaken with Metro. Yes.
So, in terms of where do we go
from here, you mentioned the
COGs, Director Solis. 25
beds is, is huge. Can you
explain what a next step might
look like?
>> Yeah, it's a systemic issue,
you know, with respect to how
homeless services is being
looked
at and ultimately directed to
be funded. there's an impact
that not just the Metro teams
are seeing,
but the entire continuum
of care is seeing. And so
anytime there's a systemic
issue like a loss
of resources, whether that be
permanent housing vouchers,
whether that be interim
housing, or any service
for that matter, our teams are
also experiencing the effects
of that. And so recourse for
moving forward is challenging.
If we were to go
to COGS and say we're aware
of the funding that you've got,
you know, are you interested
in partnering with Metro? Are
there ways in which we can help
direct people who we engage to
occupy the beds that you've
got? Those conversations are
typically okay,
but they're met
with a little resistance
because of the impact
of the system's issues.
>> Yes. I would just,
I would just add that, you
know,
we did consolidate services
into the new department
at the county, HSH. So, I would
encourage, again, I mean,
you do this anyway, but
to partner with them, to meet
with the COGs, because if
there's a model that could be
created,
I think it's worthwhile. And I
believe that members
of the board, Board of
Supervisors, would be, you
know, interested in seeing how
that can be worked out.
In part, you have
to understand, the public has
to understand that we just got
hit really hard by the federal
government as well. So, many of
those vouchers that we thought
we had went away. And now
they're shifting
from permanent housing to look
at interim housing. Not
everyone is capable
of coming up fast in speed
to meet the challenge. And it's
really bad right now. And all I
would say is let's try to work
with those that might have
funding streams that we can
connect with our departments,
and I'm sure our director
of HSH would,
would be interested in hearing
that. I know we can certainly
pass that along.
>> Ms. Mahan and I have a good
working relationship.
>> Okay, thank you. So, this is
a thank you for the work that
you're doing. this is a receive
and file and does not require a
vote,
so we can go ahead and move on
to the next item, which is
Metro Workforce Housing. And I
We're going to ask
for a presentation
on that.
>> Welcome. Morning.
>> Morning, Chair and
committee members. pleasure
to be with you. Seleta
Reynolds. I'm the Chief of
Innovation and Games Mobility
Planning. I'm joined here by
Marcel Porras, who's the
Deputy Chief of Innovation.
And, we're bringing this item
before you. it actually ties
back directly to a motion,
an addendum
to a motion that came from
Director Solis to ask Metro
to go into the marketplace and
find solutions
for workforce housing as part
of our overall affordable
housing efforts and joint
development efforts in LA
County. And so we're pleased
to bring back before you
something that we have been
reporting back
on progress and are ready
to potentially advance
to implementation.
>> Good afternoon. Marcel
Porras, Deputy Chief
Innovation Officer. Here
to present the project. So, the
project that Nathaniel has
previously mentioned was is a
97-unit workforce housing
income-restricted development.
To the right,
you see the final mix that we,
we arrived on based
on negotiations
with the developer and
supported
by our underwriting analysis.
It shifted
from majority studio units
to now be 9 studios, 65
one-bedrooms, and 23
two-bedrooms. This shouldn't be
new to y'all because I think
we're here because
of your direction
on workforce housing, but,
here are just a couple
of the main, you know,
findings that we did
through our analysis in terms
of why workforce housing is
important. One, it attracts top
talent. It builds loyalty and
retention. It improves
productivity, and it enhances
work-life balance. In regards
to location, there are 3
factors that make this location
unique for Metro's first
workforce housing pilot. One,
its proximity to Metro
operations. As you can see,
the site sits near 3 rail
divisions and 1, bus division.
its existing system
connectivity this station's
proximity to the KE Line and
the transfer at Expo Crenshaw
gives residents one-transfer
access to downtown LA and the
broader east-west corridor
today. And finally, the K
Line Northern Extension. When
complete, the KNE adds
underground transfers
to the D Line and B Line. 3
rail lines, no above-ground
transfers, and it's unique in
Metro's joint development
pipeline. In regards to,
I'm sorry, as part
of our due diligence, Metro
also dove
into other alternatives.
First, we looked
at whether or not Metro could
leverage the joint development
pipeline of projects.
However, low-income housing tax
credits, regulations prohibit
employer, restricted occupancy
in tax credit financed housing.
Second, Metro issued an RFI. as
you can see on the bottom part
of the slide, 19 total projects
were identified, 9 of which met
the 95+ unit scale threshold.
6 of those were adjacent to a
Metro rail station. We found
ourselves with only 2 projects
of the total 19 meeting
the thresholds of, but
none matched the connectivity
that the Limerick Park project
that we're looking at today,
provided slide.
So in regards
to employee benefit, Metro
identified around 2,000
frontline employees including
bus operators, rail operators,
mechanics, maintenance staff
that would qualify
for the 80% AMI threshold.
To the right of the slide, we
highlight how we would
establish the Metro employee
preference and work with the
property management team
to fill the units with Metro
workforce. In regards to the
Metro's loan, it is a $25
million loan at a 3%,
simple interest. The term
of the project is 55 years,
which coincides with the
covenant term that's tied
to the entitlements. We would
be the subordinate lender.
There would be a 60/40 revenue
split
of the residual receipts,
the refi proceeds,
or the disposition proceeds.
And then finally, Metro's net
present value is $7.2 million
worth of loan payments
over the 55-year period.
In terms of risk,
we identified 4 key elements.
The first one being
subordination. As I mentioned,
we are the second lender. The
mitigation here and what that
does is our loan and preference
are subordinate. The way we
would look to address this is
to develop an agreement that
would be acknowledged
by the senior letter for
Metro's workforce preference as
a continuing operating
requirement. Second, developer
default. So, if it was were
to go into foreclosure, the
senior lender could extinguish
subordinate interests. The
mitigation here is a step-in
right. Metro may assume
property management role to
preserve the program if the
senior lender takes possession.
Third, long-term ownership.
The risk here is the future
sale could remove Metro's
ability
to enforce the preference. The
way we're looking at mitigating
this is developing a right
of first refusal
on the first offer. Metro could
acquire the project
at any proposed sale, default,
or foreclosure. And lastly,
the construction period. Metro
is the first committed funder,
and the senior lender has not
yet been selected. The
mitigation here would be
milestone-based disbursements,
draw inspection rights,
and cure rights. Protect
Metro's capital
during construction. So,
lastly,
the staff recommendations for,
this item is
to authorize the CEO,
to execute and enter into a
loan agreement and other
related documents,
with the developer team,
authorize the CEO or designee
to negotiate and execute a
recorded regulatory agreement
establishing a Metro employee
housing preference for 100%
of the project units
to be acknowledged
by the senior lender, and
finally find that the project
is categorically exempt
from CEQA. Happy
to answer any questions.
>> Just to close out, to give a
little bit more context,
this came through as an
unsolicited proposal,
which is why the Office of
Innovation is sort of
in the role that we're in,
and we had brought it
to the board previously
to get guidance on taking it to
the next step because it
qualifies as what's called a
landmark unsolicited proposal
meaning either the dollar
amount or the nature of the
proposal passes a certain
threshold. So, we brought that
before you and got your
guidance
on what things we wanted
to negotiate with
in the next step, and those
negotiations have concluded
successfully. And so now we're
bringing it back
before you and asking
for the, the actions listed
above. Thank you.
>> Thank you.
Before we take questions,
comments from directors,
let's go ahead and I'll turn it
over to you, Deanna,
to see if we have any speakers
on this item.
>> This is public comment
for item 36. Please press pound
2 if you'd like to make a
comment. I have one caller.
Please unmute.
>> Caller ending in 3784,
please state your name. You
have 1 minute
to state your comment.
>> Okay, so first of all,
I just have to say how
embarrassing it should be to
you that you have approximately
2,000 employees who are making
At or below 80,000 80%
of area median income,
which is currently $92,080 a
year. Like, why aren't you
paying your employees more?
Like, like genuinely, what why,
why do so many employees
qualify for this based
on the metrics you're using?
Because it seems like you
should be paying your employees
more so that they actually are
paid a living wage. And then
you should, You know,
raise the requirements for this
so that they can your employees
who are now making a living
wage in the city of LA, one
of the most expensive county
of LA, one
of the most expensive counties
in the country can now qualify
for the Housing Up requirements
that meet the new raised wage
for all your employees. Is this
that's just embarrassing how,
how little your employees are
apparently making.
>> That was the last public
comment.
>> Thank you. Okay, I'm going
to start with Director DuPont
Walker and then Director
Solis.
>> Thank you, Mr. Chair, and
thank you, Department of
Extraordinary Innovation.
>> Strategic Innovation.
>> Strategic.
>> Thank you.
>> Strategic. Strategic and
Extraordinary Innovation.
>> The extraordinary is just
implied. We don't have
to state it anymore
in the title of the cabinet. we
are now strategic.
>> I admire your humility. I do
want to put this in context
because this is an opportunity
for Metro again
to trailblaze. I want to point
out that we will learn some
things
from this because it is, I
believe, a first. As was the
business interruption fund that
Metro put in place. I want to
remind us that when that
happened,
there was great angst
about it. People thought it was
not deserved.
But what a number
of us who supported it had
in our ears was the statement
of the then head of the
Department of Commerce, who
said they would hope that with
our system we would solve some
of the problems that had
existed in the industry for
decades and are directly
related to housing. This board
decided to move
beyond just the core mission
and to take a look at impact
on community. And impact
on community means impact
on people. And so with the
Business Interruption Fund, we
said that it was just not a
good idea. But I want
to put it in the context
with affordable housing also.
Affordable housing is not
low-income housing. It is a
definition that no one should
spend more than 1/3
of their income for housing.
So, if a millionaire was
spending $500,000, it is not
affordable. We tend to think
of that in today's world
because there's so many people
who need it who happen to fall
within the range
of low income. But the
low-income housing tax credit
originally defined this upper
limit as 120% AMI,
and we're looking at 80%. So,
we're still struggling to
address a problem we knew
existed several decades ago.
It is absolutely trailblazing
and a wonderful opportunity
for Metro to set an example, to
create a model that transit
agencies
across the country can use,
because our construction has
tended
to tilt housing affordability
in the wrong direction. It has
brought about extreme
gentrification nationally, and
for us
to intentionally put housing
in place is important. Let me
add quickly that that means the
people who work for Metro, the
ones who keep our buses
running, our buses running,
our buses running,
maintain our mail system, and
serve our riders every day
deserve
to have the opportunity to have
affordable housing. I'm happy
to see the change in mix away
from the studios that sometimes
when we charge a large rent we
call the lofts. It's still the
same thing,
but it provides that
opportunity
for not only one-person
families
but 2 and 3-person families
to have a good place to live
within the City of Los Angeles
because the cost of housing,
whether it's rental or
homeownership, is driving
certain income families out
of the city. And this city
deserves to have diverse
housing opportunities
for persons
with diverse incomes, because
if our residents do not have
to spend more than one-third
of their income for housing,
the quality of life changes,
and they might even be able to
have homeownership because
they're able to have savings
and put money aside for the
other things that they would
like. Thank you
for this opportunity. Thank you
for those who have envisioned
this particular project,
Nathaniel. Thank you
for bringing it to a community
that's an equity-focused
community that needs it as a
start, not a finish,
as a start. This innovative
pilot will help us learn how to
tackle transportation as a part
of community development, which
includes housing. I'll have
some more questions later, but
I cannot tell you how exciting
this is
to someone who has spent most
of my professional life trying
to make sure that affordable
housing stays on the table.
And for Metro to take this step
is very important
to the entire community, but to
the affordable housing
community, I say kudos, Madam
CEO. Kudos, Department of
Strategic Innovation. And kudos
to all of Metro, especially
those who will find a way as an
employee of Metro to be close
to their worksite,
to have a quality of life
for themselves and
for their families, and to have
communities which are going
to be restored in ways that all
income levels can find a home.
Thank you, Mr. Chair.
>> Thank you, Director.
Director Solis.
>> Thank you, Director DuPont
Walker. I mean,
you are the guru on housing for
our communities and especially
for our riders and for all
of us. And I want to underscore
how proud I am that we've been
able to come to this point.
This has been in the works
for some time
to create this model. And
at the County of Los Angeles,
we're also looking
to do similar things. We had
the idea of converting an old
general hospital into housing
for employees, for staff,
for nurses, and
for people who live
around the community. So, the
concept isn't new,
but it is new when it comes to
a transit agency that
oftentimes people say,
why are you bothering
with housing? Why are you
bothering with the homeless?
Why are you bothering
to extend, you know,
your values
in a different way?
But the values for me come home
because it's our riders and the
folks that depend
on this system of ridership,
whether it's bus riders or
whether it's mechanics or
sanitation workers that clean
our buses. Everyone should have
an opportunity. And I'm very,
I'm very happy to see this
project move forward. I'm even
interested in seeing if
something can happen at the
El Monte Transit Center because
we do have some excess space
there, and I know other folks
have approached us
to do development there, but I
think this is where I think it
really changes the whole
paradigm because we are looking
at not just affordable
but sustainable, and also
for people who do work in
certain income brackets that we
know need
to have opportunity as well.
So, I want to thank you, and I
hope,
I hope you will come back maybe
with some ideas about the El
Monte Transit Center. So, thank
you. Thank you for your work.
Thank you, CEO.
>> Thank you, Director Solis.
Thank you, DuPont, Director
DuPont Walker. I will not be
able to capture the eloquence
of either of you as it relates
to this project. Obviously,
this is a project, that I,
that I would support. I, I,
I do want to just situate it
though. as I think you know,
I chair the Finance, Budget
Audit Committee. I know these
are general fund dollars if I
understand correctly. Am I
correct? And we have finite
general fund dollars.
Michelle?
>> Good afternoon no,
good morning. Michelle
Navarro, interim Chief
Financial Officer. This is
general fund revenues. We do
not need funding this year. We
did split it up
across multiple years,
so this will be a need in the
next fiscal year. We are going
to look and focus on our joint
development lease revenues,
then also our advertising
revenues, where we do
anticipate an increase in these
revenues because we had gained,
some good partnerships,
during this World Cup. And
while this is general fund and
operating eligible dollars, we
do see this as a critical
investment in our workforce
that will benefit and attract
and retain our employees.
>> And that's why I raised the
question, right, is for us
to be able to see the value
that while it yes,
it does come
from general fund dollars,
there is this is a positive
gain
for us as an organization. But
as we situate this conversation
around the fiscal cliff, right,
we as directors are going
to have
to make very difficult
decisions about what we what is
essential, what is primary,
what is secondary. So, I raise
it in that context with the
full understanding that this is
a, this is a great project, I
think, for Metro. And certainly
you say it's a pioneering
project. This is a, this is a
first, right? And, and if I
understood correctly, and,
is that this is going
to be available to Metro
employees? It is not going to?
>> Correct.
>> Because, because we're not
receiving funds from other
entities that would require us
to include others outside the
Metro family, if you will.
Yeah, that's significant. I
think there's a lot
of cities that would love
to be able to do that, where,
you know, when we talk
about taking care of,
in this particular case,
homeless, is let us,
let us take care
of our homeless population. But
it doesn't always work that way
because we get funds from
multiple different sources so
that we have
to broaden our reach, if you
will, understandably. So, thank
you, and thank you for that.
All right, this is a, this is an
action item, and I have a
first, and I, I have first
from DuPont Walker and a second
from Solis, and I'm not hearing
any objections, so,
the item moves forward. It is
approved. Thank you. Thank you.
All right, before we go
to general public comment,
Director DuPont Walker, had
asked me if we could revisit
item 32, not to take action
on the item, but just so she
can provide some comments
on the item. So, I'm going to
go ahead and say yes and then
turn it over to Director
Dupont Walker.
>> Thank you, Mr. Chair. Very
quickly, I apologize because I
should have been paying
attention, but I did want to
note the excellent performance
with small business in this
particular contract and
proposal. And
with the talent bank alone,
it speaks to our effort to help
small businesses not only
survive but thrive.
But when we have a number
of them proposed, I think it's
17%, which exceeds our request,
I just wanted to take the time
to say thank you and kudos
for helping Metro continue
to achieve its goal
of providing an opportunity
for everyone.
Thank you, Mr. Chair.
>> Thank you, Director
Dupont-Walker. Okay, let's go
to general public comment.
>> This is general public
comment. Please press pound 2
if you'd like to speak
under general public comment.
We have one caller.
Please unmute.
>> Caller ending in 3784,
please state your name. You
have 1 minute
to state your comment.
>> Yeah, so I, I do think it's
a little weird that both the
Chair and Vice Chair are absent
today. Like, I mean, I give
Bass the benefit
of the doubt. Maybe she's
dealing with the flood thing.
But I don't know, she seems
to have a habit of missing the
meetings. I guess we're
probably better off without
Barger's presence anyway, so,
you know. But, but I mean,
it's just like, you know, these
board members aren't even
interested
in attending the meetings, it
seems, but yet they don't want
to give up their power. And
that's why the board structure
they recommended is completely
just You know,
basically doesn't take away any
of their power or listen
to any of the things that the
public said over the months
of hearings that they had.
And, you know, these board
members have all have all kinds
of scandals. And now the now
they want to add a new board
member who's literally a MAGA
Republican. They want
to literally add a MAGA
Republican to this.
>> That's the last public
comment.
>> All righty, thank you. All
right,
this meeting is adjourned.
Everyone have a great rest
of your day. Thank you.