Glendale city officials on Tuesday agreed to help finance a $2.1-million project to develop a 22-unit apartment complex for lower-income renters.
The project is the first to use a "creative financing plan" in which city tax dollars will not only be spent to build new housing, but to provide a return on the investment to be used to develop other projects in the future.
A veteran nonprofit developer of senior housing--Southern California Presbyterian Homes--was given final authority to build a three-story apartment development on city-owned land at 549-605 E. Palmer Ave. Construction is scheduled to begin in July and be completed within a year.
The city will receive income from the 55-year lease of the land, plus interest payments on a 30-year, $800,000 construction loan, said Madalyn Blake, director of community development and housing.
Eventually, the city expects to gain more than $10 million from its initial investment.
"Hopefully, this is just the beginning of what will be done," said Councilman Larry Zarian, an advocate of city and privately financed development of affordable housing. He called on city planners to "make a bull decision" to develop incentives for private builders of low-cost housing. "We talk about senior housing; in fact, we must do something about senior housing."
The action was taken at a joint meeting of the City Council and the Housing Authority. The Housing Authority is made up of council members and two appointees.
Monthly rents of apartments in the project are expected to range from $365 to $415, depending on household income. Federal and city stipulations require that all units in the development be retained for lower-income senior citizens for 55 years. One unit is set aside for a resident manager.
The city has pledged to spend an annual federal rent subsidy of $87,000 for 30 years to make up the difference in rent paid by tenants. Those funds--expected to reach $2.61 million over 30 years--will not be recovered, Blake said.
State law requires the city to set aside 20% of its portion of property taxes paid by property owners in the downtown redevelopment area for low- and moderate-income housing. Budgeting some of those funds for the Palmer project would help fulfill the state requirement, city officials said.
None of the tax funds pledged by the city will come from property owners outside the redevelopment zone, officials said.
Barbara Alm, secretary of the Adams Hill Homeowners Assn., said residents are concerned about the height and density of the project in their neighborhood, but called the development "a lovely plan."
Leaders of the Glendale Greater Council on Aging also applauded the project and urged city leaders to aggressively tackle a growing need for affordable senior housing.