Former Long Beach Armory - 854 E. 7th Street
City Council Meeting – January 24, 2023
Former Long Beach Armory
Background
2 • Premises: Former Long Beach Armory located at
854 East 7th Street.
• Buyer/Developer: Armory Arts Collective, LP .
• Proposed Development: 64‐unit affordable
housing project.
• Purchase and Sale Agreement: On 12/7/21, City
Council authorized an agreement with the Buyer/
Developer for fee purchase of the property.
• Purchase Price: $5.15 Million, to be paid through
a 55‐year residual receipts loan.
• Developer Request: Buyer/Developer requested
t oa d da nO p t i o nt oL e a s et ot h eP S At om a k et h e project more competitive for tax credit financing.
If optioned, the Purchase and Sale Agreement
would convert to a long‐term lease.
Recommendation
General Terms and Conditions:
3 • Lessor: City of Long Beach, a municipal corporation. • Lessee: Armory Arts Collective, LP ., a California limited partnership. • Term: 57 years.
• Base Rent: $1 per year .
• Additional Rent: Residual receipts payment based upon the appraised value of the Premises, which is $5.15 million. Residual receipts is comprised of a pro‐rata share of 50% of the cash flow from the Proposed Project after all deferred developer fees are paid. • Affordability: 63 units will be restricted to lower‐income households at or below 80% of Area Median Income (AMI). In compliance with the Surplus Land Exemption under Government Code Section 37364(c), 40% or 26 of the units will be restricted to lower‐income households below 80% of AMI. Of those 26 units, half or 13 units will be restricted to very low‐income households at or below 50% of AMI.
• Encumbrances: Fee interest shall not be encumbered but Lessee may encumber its leasehold interest. • Mortgage Protections: The lease shall contain industry‐standard leasehold mortgage protections.
Recommendation
Amend the Purchase and Sale Agreement, dated March 10, 2022, with Armory Ar ts Collective, LP (Buyer/Developer), for the disposition of City of Long Bea ch‐owned exempt surplus property located at 854 East 7th Street, commonly known as t he former Long Beach Armory, to add an Option to Lease in lieu of a fee purchase. 4