VIRGINIA AVENUE APARTMENTS
2033-2101 Virginia Avenue
Santa Monica, CA
PROGRESS REPORT TO CITY COUNCIL
August 11, 2026
AGENDA
1. SCOPE OF WORK / CONSTRUCTION UPDATE
2. CURRENT PROJECT SCHEDULE
3. RESIDENT OUTREACH AND COMMUNICATION
4. COMMITTED FUNDING (at construction closing)
5. BUDGET OVERVIEW – pro forma vs. projected actual
6. BUDGET VARIANCE ANALYSIS
7. GAP FINANCING
8. QUESTIONS / COMMENTS
SCOPE OF WORK
Decision-Making Process
1. PROJECT CONDITION REPORT
❑ Visually inspect site, buildings, mechanical and electrical systems, exterior façade, few interior units ❑ Identify deferred maintenance
❑ Constraints – furniture obstruction
❑ Receive an opinion of costs to remedy observed conditions
2. SCOPE OF WORK CONSIDERATIONS
❑ Fire life safety
❑ Structural
❑ Water proofing
❑ Title 24 (energy efficiency)
❑ Americans with Disabilities Act (ADA)
❑ Fire sprinklers
❑ Architectural Review Board (ARB)
❑ All electric building (CCSM preference)
❑ Technical feasibility vis-à-vis resident requests
3. COST / BUDGET / FUNDING AVAILABILITY
❑ Value-engineer (i.e., community center)
❑ Trade-offs
SCOPE OF WORK
Create safe and modernized living environment
Remediate mold and asbestos
Remediate termite damage
Replace roof
Convert to an all-electric building (i.e., no gas)
Replace flooring in units
Install HVAC system
Install new plumbing
Upgrade electrical infrastructure and wiring
Install new electric kitchen appliances
Provide new kitchen cabinetry
Construct new laundry facility
New landscaping
Repair concrete sidewalk (off-site improvement) and walkways
CONSTRUCTION SCHEDULE / TIMELINE
Construction commencement – November 2025
Duration – 19 months
** Estimated Construction Completion – June 2027 **
WORK TO BE COMPLETED ACTUAL / PROJECTED
COMPLETION DATE
Unit Prep - remove additional furniture in all units December 8, 2025 Demolition January 8, 2026
New Framing April 2, 2026
New Plumbing April 2, 2026
Insulation May 28, 2026
Drywall Installation June 11, 2026
New Windows September 18, 2026 (P = projected)
Painting September 7, 2026 (P)
New Flooring October 5, 2026 (P)
Roofing October 22, 2026 (P) Kitchen Countertops November 16, 2026 (P) Common Areas – laundry room, courtyard December 25, 2026 (P) Sidewalk repair, fencing, landscaping, irrigation, final inspections January – May 2027 (P) Project Completion at TCO (i.e., ability to secure fire and life safety sign-off) June 2027 (P)
RESIDENT COMMUNICATION AND OUTREACH
• As requested by Council, conduct series of in-person meetings (quarterly) 6/18/26 – 1
st in-person meeting
❑ Next quarterly meetings: October 2026, January 2027, April 2027 • Provide monthly email updates with photos
• Tenants can email questions/concerns
RESIDENT COMMUNICATION AND OUTREACH
Resident Site Tours
July 13th (9 residents attended)
July 14th (13 residents attended)
PRE-RENOVATION
NEW FRAMING
NEW FRAMING
NEW PLUMBING
NEW ELECTRIC
NEW INSULATION
DRYWALL INSTALLATION
NEW LAUNDRY ROOM
BUILDING EXTERIOR
COMMITTED FUNDING
(at construction closing)
SOURCE AMOUNT
City of Santa Monica – loan $34,800,000
City of Santa Monica – Office of
Sustainability & Environment
$24,999
HUD CPF (grant) $850,000
LIWP (grant) $200,000
TOTAL $35,874,999
Projected Actual Budget (+ $2.4M) $38,307,795
PROJECT BUDGET
(Original vs. Projected Actual)
Assumptions:
• Project completion in June 2027
Budget:
• Original = $35,874,999
• Projected Actual = $38,307,795
• Projected Gap = $2,432,796
• Looking to bridge gap
Projected Budget Gap Drivers:
• Relocation +$1.6M
• Hard Costs +$2.7M (offset by $1.2M
contingency)
• Offset by lower than expected soft
costs(i.e., insurance, furnishings, predev
holding costs, etc.)
PROJECTED ACTUAL
BUDGET
VARIANCE
Line # Description
A B C
(B - A)
ACQUISITION / HOLDING COSTS
1 Land & Building Cost 13,665,100 13,665,100 0
2 Predevelopment Interest/Holding Costs 273,885 206,520 3 Total Relocation Expenses 1,777,747 3,385,206 1,607,458
HARD COSTS
4 Construction Contract 13,269,484 15,963,979 2,694,495 5 Hard Cost Contingency 1,257,206 0 -1,257,206
SOFT COSTS
6 Architect 896,174 896,174
7 Total Survey & Engineering 134,850 134,850
8 Bond Fees/CDLAC Application Fees 3,700 3,700
9 Title & Recording 25,000 47,032
10 Insurance 600,000 386,847 -213,153
11 Lender Expenses 25,000 25,000
12 Legal Fees 66,930 45,131
13 Capitalized Reserves 108,658 76,658
14 Other: 20-Year Operating Reserve 507,634 457,634
15 TCAC App/Allocation/Monitoring Fees 1,500 1,500
16 Environmental Audit 11,770 32,770
17 Local Development Impact Fees 233,646 233,646
18 Permit Processing Fees 105,984 337,339
19 Marketing 3,850 3,850
20 Furnishings 100,000 0 -100,000
21 Market Study 17,100 17,100
22 Accounting/Reimbursables 25,000 25,000
23 Appraisal 9,500 9,500
24 Other: Construction Manager 123,500 123,500
25 Other: Deputy Inspector 150,000 75,000
26 Other: Security-Operating Period 20,000 20,000
27 Other: Administrative & Organizational 14,000 14,000 28 Other: Prevailing Wage Compliance 87,500 87,500
29 Soft Cost Contingency 330,053 3,031
30 Developer Overhead/Profit 2,000,000 2,000,000
31 Syndication Consultant 30,228 30,228
TOTAL 35,874,999 38,307,795 2,432,796
ORIGINAL BUDGET
Overall projected net budget gap of $2.4M
1. Hard costs projected to be over budget by $2.7M, driven largely by:
• Extensive re-framing
-- mold remediation and termite damage
• Plumbing damage and repair
2. Relocation $1.6M higher than budgeted:
• Relocation originally assumed to be multi-phased, but changed to single-phase • Spending more on temporary relocation rent
3. Relocation and hard cost overruns to be offset by ~$500k+ in savings in soft costs • For example, insurance and furnishings
PROJECTED BUDGET GAP
Key Drivers
CITY LOAN
Spent-to-Date as of July 2026
Loan:
• $34,800,000
Spent-to-Date:
• $26,633,843 (77%) Acquisition
52%
Construction
31%
Soft Costs*
9%
Relocation
8%
*Soft costs include expenses such as architecture,
permit fees, legal, insurance, etc.
POTENTIAL PATH TO BRIDGE FINANCING GAP
• Congressional Funds
- Amount TBD
• BUILD Incentive Grant (CA Energy Commission)
- Potentially $1M
• Section 8 Project-Based Vouchers (up to 20)
- Potential to raise $1M in perm loan
- At least five (5) vacant units upon renovation completion - Need to use at least 14 vouchers
- Currently working to determine how many households are interested and will qualify • Continue to explore other avenues to bridge gap
QUESTIONS / COMMENTS