PASADENA — The Board of Directors, after some last minute financial tinkering and over the objections of some of its members, on Tuesday approved the ambitious $50.5-million Marengo block development project.
The board's 6-0 vote, with Director Jess Hughston abstaining, followed two years of negotiations between the city and the Santa Monica-based Janss Corp., and it clears the way for Janss to secure financing to buy the property.
Director Rick Cole said the project will be a "showcase for downtown Pasadena that will spur quality projects in the years ahead."
Yet, Cole and others voiced concerns about the $6-million cost of rehabilitating the city's aged police headquarters building into low-income senior housing.
"This is one of the first projects I've had to vote on where I don't feel comfortable completely with the proposal," Director Chris Holden said. "I will support it reluctantly and very cautiously in terms of what I see the overall project doing in terms of the civic center area."
Hughston abstained because he said $6 million is too much to spend to overhaul the police building.
Cole, who shared Hughston's concern, called the senior housing segment of the project the "least worst" of the developer's choices for the building.
But, he added, "We needn't be gloomy about the project. In fact, I think we should be positive. We're adding 1,000 residents to downtown who will help anchor (developments in) Old Pasadena and will add to the safety and livability of downtown in future years."
The Janss Corp. began designing the development more than two years ago.
The project will be built on a triangular-shaped, four-acre parcel bounded by Holly and Walnut streets, Marengo Avenue and the Santa Fe Railway tracks next to Memorial Park.
The city-owned parcel is to be sold in 1991 to Janss for $4 million in cash and a $2.9-million note payable to the city over 22 years. Janss will construct 350 residential units in nine separate buildings above a two-level underground parking structure and will build 9,000 square feet of retail space. In addition, the company will demolish the north wing of the four-story police building and rehabilitate the rest of the structure to make 44 senior apartments.
Remaining untouched by the project will be the American Legion building, the Brookmore Apartments and the Turner & Stevens building that houses the Holly Street Bar and Grill; the Fire Department headquarters, fire station and emergency operations center will be relocated.
Construction is scheduled to begin in June, 1991, with completion expected in three or four years.
Objections to the project's financial arrangements surfaced late last year from members of the Endowment Advisory Commission. They objected to the $1.3 million in city housing money that will be used to help the developer meet the costs of revamping the police building. They said the city lacked sufficient collateral on the $2.9-million loan. And they also noted that the historic, 60-year-old police building could be demolished--instead of refurbished--if Janss fails to secure financing for the building.
In addition, commission members said that Janss may not be able to deliver on a promise to set aside 20% of the 350 new residential units for low- and moderate-income residents. Construction would depend on whether Janss could obtain financing from tax-exempt multifamily bonds.
The commission continued voicing its objections during final deliberations last week. The board then asked commission members to review the project with representatives of the developer and with city planning staff members.
The negotiations did not allay commission members' concerns about the expense of the senior citizen housing construction. But the commission managed to negotiate an increase in security guarantees to the city on its $2.9-million loan. Developer Bill Janss agreed to supply a $500,000 deposit and a personal guarantee against the loan.
Max Nardoni, the project manager for Janss, also assured the board Tuesday that financing for the police building appeared certain. He added that the corporation may receive up to $500,000 in historic building tax credits that could reduce the city's contribution to the police building project to $800,000.
"The refinements made seem to protect the city's interests quite well," said private financial analyst Bill Straw, who was called in last week to help improve the agreement. "Is this a good deal? We'll all know in 20 years."