Affordable housing approved

Barbara Diamond

Mayor Toni Iseman almost found herself the lone support Tuesday night

for the affordable housing project on Glenneyre Street.

“The cost is outrageous,” council newcomer Elizabeth Pearson said.

“Aren’t there any alternatives?”

Neither Pearson nor veteran Councilman Steven Dicterow was

inclined to second Iseman’s motion to increase the city’s financial

involvement to more than $2 million.

Pearson relented when she was informed that the project would

include parking for each of the 27 units in the project and 22

city-owned spaces, which would bring in some income.

Dicterow went along.

With council members Cheryl Kinsman and Wayne Baglin banned by

state law from voting on the project because they each own property

within 500 feet of it, Iseman had to sway Pearson or Dicterow in

favor of the project or see it discarded. She got backing from City

Manager Ken Frank.

“I agree that its expensive, but it is the last affordable housing

the city will have to do for years and it’s considered a model

project,” Frank said in defense of the project.

Affordable housing is mandated by the state. Funding for the

Laguna Beach project also has come from sources other than the city,

including the state and the county.

Frank said the expense of building in the coastal zone is one of

the reasons affordable housing projects are rare in ocean-side

communities, especially since the county treats Laguna Beach the same

as Stanton.

“The [city’s] Affordable Housing Committee spent five years

looking for a site.” Frank said. “This was bought with Affordable

Housing In-lieu Funds. If we don’t build it, we will have to replace

the funds.”

That would have meant junking the project, which has been underway

since 2001.

A representative of project developer Related Companies of

California promised there would be no more increases for the city.

Escrow is expected to close Wednesday.

“If they come back for more money, I will vote against it,”

Pearson vowed.

The council approved actions on Tuesday that totaled $665,163,

including a $192,163 loan from the county, but not the $675,000 the

city paid for the property or the $815,000 the city will pay for its

parking spaces.

All told, that comes to a $2,155,163.

The city’s parking fund will be tapped for the costs of the 22

public parking spaces, which are considered separate from the

project.

The housing in-lieu fund will loan the project $348,000 toward

construction costs and the $192,000 pass through from the county. The

insurance fund will pay $125,000 for a policy premium to cap the

costs of hazardous materials insurance.

In return, the city gets 26 affordable housing units, one

manager’s apartment and 49 parking spaces, 22 of them earmarked for

the public.

The developer will manage and maintain the property, which was

designed to reflect the city’s Craftsman-style architecture.

“This project is more of a can of worms than the Festival of Arts

lease,” Frank said.

Underground parking was originally estimated about 2 1/2 years ago

to cost $23,000 per space. That estimate has increased to $37,000 per

space, the going rate, a city consultant said, for underground

parking.

Surface parking is estimated to cost between $35,000 and $40,000

per space.

The proposed project is on the site of the old Ahimsa Building,

formerly a nursing home and more recently a haven for cats displaced

when the Bluebell Foundation was damaged. It is across the street

from the Glenneyre parking structure.

It was purchased by the city about six years ago, mostly paid for

by contributions from the developers of Treasure Island to the

Affordable Housing In-lieu Fund. Developers pay into the fund in lieu

of including the housing in their projects.

Related Companies of California was chosen by the council from

bids submitted to the city on the project. The developer will pay the

city $1 per year for 55 years.

The number of units per square foot of property exceeds the norm

allowed in the city and the number of parking spaces is below the

usual requirement, both approved under special circumstances

permitted as incentives for the construction of low-cost housing.

Residency will be restricted to renters with incomes of about

$21,000 to $22,000 a year.

Twenty-three of the units will rent for $529 a month and six of

them for $480 a month, the difference based on the county income

standards.

The project is expected to be completed in about 14 months.