The City Council approved an application to the state for a $250,000 grant to renovate the former Aviation High School gymnasium. The money would be used to construct showers and locker rooms, improve access for the handicapped and expand the restrooms. . . . A petition by John Horvath to convert two detached houses on Bataan Road to condominiums was denied by the council Monday night. Horvath had asked the city to grant him a "hardship" exception to the city's condominium conversion ordinance. The ordinance allows applications for conversions only when the vacancy rate for rental units in the city exceeds 4%. Planning Director Harlan J. Curwick said the current vacancy rate is 3.42%. Horvath said he has been unable to sell the two units and has fallen behind on mortgage payments.