Dear Editor,
Listening to [the May 27, 2025] city council meeting and the presentation by Ms. Tara Barasukas of Community Corporation of Santa Monica (CCSM) troubled me. She reported that CCSM applied or will apply for funds from several sources to “supplant the $16m that the city council directed staff to include in the upcoming two fiscal year budgets” (approximately 00:35:00 in the recorded session). Then, she went on to report the essential failure to secure any such funds.
These failures included (a) the unavailability of funds from the LA County Development Authority totaling $8.2m, along with 42 housing vouchers because such funds and vouchers are not available to projects that receive tax credits; (b) the unavailability of funds from HCD Homekey+, totaling $19m because such funds are not available to projects that receive tax credits; (c) the waitlisting of the project for 23 Section 811 vouchers; and (d) the intent to apply for $20m from HCD MHP, the award of which CCSM wouldn’t know until August.
That reminded me of her presentation from March 10, 2025, which I reviewed, and which contained the following slide (this can be found at approximately 1:14:00 into the meeting video).
The narrative given during the presentation of the table was the “unfortunate situation” regarding the $16m shortfall. These were intended to create strategies to “overcome the shortfall.” In essence, her statement was clearly intended to lead the council and citizens to believe that disbursing the $16m would not likely be necessary. She then asserted that, given the likelihood of success, that CCSM would get $9.6m from these funds. The implication was either (a) that should such funds be received, the full sum of the loans would not be necessary; or (b) that these funds, if received, could be used to service the debt.
Also, during that meeting, Ms. Barasukas stressed the importance of the timing of this because of the potential for expiration of the tax credits that may be available to CCSM (note, such credits do not benefit or lower the cost for Culver City, they benefit CCSM). However, the statements she made during last night’s council meeting make it clear that if CCSM has tax credits available, two of the largest sources of funding, the LACDA $8.2m plus 42 vouchers and the $19m of Homekey+ funding, would not be available for the project.
The HCD MHP funding is even more interesting. One would think that, should CCSM obtain a large sum from HCD MHP (they are seeking $20m), that $20m would be used to repay the loan to the city. At least that was the implication. But she did not state whether the tax credit would or would not compromise the ability of CCSM to obtain such funding, so I did some research.
The guidelines for HCD MHP funding can be found here: https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/SuperNOFA/mhp-guidelines.pdf. The good news (for CCSM, at least) is that HCD MHP funding is not precluded by
tax credits. The bad news (for Culver City) can be found in Section 7307(a)(4), which states in relevant part:
“(a) When sizing the loan, the Department will consider all other available financing and assistance, including the full amount of any tax credit equity generated by the Project. In addition, the loan amount shall not exceed the total eligible costs required to do the following:
(4) With the exception of deferred Developer Fee, Department funds shall not be used to supplant other available financing, including funds committed by local jurisdictions.”
In layman’s terms, this means that the HCD MHP funds cannot legally be used to pay the city back for the $16m loan. Her statement during last night’s meeting, that the listed sources of funding would be used to “supplant the $16m that the city council directed staff to include in the upcoming two fiscal year budgets” is materially false and misleading.
Now, I am not a public financing attorney nor an expert in the field. But I found this section in about 20 minutes of research trying to learn more about the effect of tax credits. It frankly was not very difficult. It would be surprising if the exclusion of the other funding sources because of tax credits would have been substantially more difficult to find.
Ms. Barasukas was very clear that she and CCSM had substantial expertise in this field, having built several projects in Santa Monica with even greater city funding. In short, Ms. Barasukas knew or should have known about the aforementioned issues with funding, including the unavailability of major funding sources should tax credits be given, the limitations on use of HCD MHP funds, and the effect of these issues on CCSM’s ability to supplant Culver City’s prospective $16m loan. Remember, we are here now, with this illusory emergency request, because the loan was necessary to save CCSM’s tax credits (which paradoxically disqualify it from major sources of funding), not because it would have any positive effect on the city being able to get paid back for the loan. In fact, the opposite is true.
One can only conclude that CCSM was either grossly negligent in their presentations regarding this funding or intentionally misrepresented this funding to the council and citizens of Culver City. Neither is acceptable and either is sufficient cause to immediately disqualify CCSM from any participation in the Jubilo Village project or any other project in Culver City.
To put it in layman’s terms, CCSM is either lying outright to the council and the city or is woefully unqualified to do this project. Those are the only reasonable conclusions that can be made.
I certainly hope that the council meet with CCSM on this matter forthwith and immediately remove CCSM from any participation in this and any other Culver City projects.
Respectfully,
Gary M. Zeiss, Esq.