A proposal to resurrect the 63-year-old Santa Ana Hotel as low-income housing for the elderly sparked heated testimony Monday night before the Santa Ana City Council.
A partnership of architect Donald Krotee, builder Al Shankle and the nonprofit Feedback Foundation had requested approval for a $900,000, low-interest loan from the council to complete a complicated $3-million package to finance rehabilitation of the building, which was closed in 1983.
According to the developers, tenants would have to earn less than the area's median income of $12,800 a year in order for the loan to be approved. If the City Council decides to approve the loan, the hotel could be reopened by October, 1987.
But members of the First Presbyterian Church next door to the hotel argued strenuously Monday night against the plan. While they admitted that they would like to purchase the property for parking or expansion, they said their fear is that transients would again occupy the shuttered structure.
Church spokesman Bob Politiski said: "The First Presbyterian Church is not against housing for low-income people or senior citizens. We will support it at an appropriate location."
Church members also expressed concern about a lack of parking near the hotel.
After more than an hour of testimony, the council decided to delay a decision until its next meeting, to allow further staff analysis of the project.
Several council members said they don't see the project as cost-effective because the developer would have to spend about $3 million on a $500,000 building. Councilman Wilson Hart said he estimated the income from tenants at about $12,000 a month and wondered how the applicants could afford to pay off the loans for the $3 million at that rate.
Council members also expressed concern over the legality of limiting residency to the elderly.
Krotee said the state is willing to take "whatever we can afford" in payments on a 3%, $1-million loan approved last April by the state Department of Housing and Community Development. That money will be available only if the developers can put together all the financing and obtain city approval.
Krotee said tax credits for private investors make the project affordable.
LaDale Dunbar, spokeswoman for the Feedback Foundation, which would manage the project, said the entire loan package must be put together by Oct. 10 or the state money will be lost.
She said the money, made available for rehabilitation of old, shuttered hotels, was sought for several projects around the state, and if full financing can't be obtained for the Santa Ana Hotel, "they'll probably give it to one of the other applicants."
City officials closed the hotel in December, 1983, and evicted the last of 58 residents a month later. The building was boarded up after studies showed that it would require about $750,000 to bring it into compliance with the city's seismic safety code.
The developers' plan would prevent the hotel from becoming a refuge for transients, Dunbar said, because the hotel would have a resident manager and all prospective tenants would be screened to ensure that no transients move in.
As for the parking problems raised by church members, Dunbar said a city plan to build a parking garage about a block from the church would fulfill needs in the area. Any hotel tenant who drives a car could be required to show proof of off-site parking, she added.
The hotel, which used to rent rooms for about $95 a week, would charge rates of about $165 to $250 a month under the proposal. About 72 rooms would be available, along with about 16,000 square feet of commercial space on the ground floor and in the basement that would be leased at rates of 45 cents to $1.15 a square foot.