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Agency Homes In on L.A. Hotel

The city moves to issue $55million in tax-exempt bonds so a developer can renovate the historic Alexandria and keep it affordable.

October 21, 2005|Cara Mia DiMassa | Times Staff Writer

In an effort to keep one of downtown Los Angeles' biggest residential hotels as affordable housing amid the explosion of high-end condo development, the city is considering issuing $55 million in tax-exempt bonds to developers who want to renovate the Alexandria Hotel.

The nearly-500 unit Alexandria, built in 1906, was once one of the city's grandest hotels. An ornate, 60-foot-high lobby of Italian and Egyptian marble and extravagant gold leaf ceilings welcomed guests, who included members of the Hollywood elite and three U.S. presidents, Theodore Roosevelt, William Taft and Woodrow Wilson.

But that glory faded long ago. For the last few decades, the building, at 5th and Spring streets, has been home to a mix of the elderly, disabled and working poor, who pay several hundred dollars a month for rooms without kitchens.

As downtown's renaissance swirls all around, the Alexandria's own dazzling architecture and location have made it a prime target for conversion. The family that owns the hotel has long been rumored to be in talks to sell the building.

For The Record
Los Angeles Times Wednesday October 26, 2005 Home Edition Main News Part A Page 2 National Desk 1 inches; 37 words Type of Material: Correction
Alexandria Hotel -- A map with an article in Friday's California section about the Alexandria Hotel in Los Angeles showed the hotel on the northwest corner of 5th and Spring streets. It is on the southwest corner.

The new effort to keep the Alexandria as affordable housing comes a week after the City Council voted to draw up a temporary moratorium on conversions of single-room occupancy hotels to lofts and condos amid concerns that the poor who have called downtown home for decades are being pushed out.

On Thursday, the Community Redevelopment Agency gave initial approval to a San Diego-based developer's plans to finance the acquisition, construction and rehabilitation of the hotel.

The developer, Amerland Group, specializes in affordable and senior housing, and under the terms of the deal, would keep the units as affordable housing for 55 years.

Backers described the plan as a milestone for downtown, where a historic building would be renovated but still reserved for units with below-market rents. Until now, developers have said the cost of restoring old bank buildings and other historic structures was so high that the only way they could make their money back was to immediately sell the units as condos or charge hefty rents.

"Every other project downtown that has involved an older building generally has involved conversion to luxury lofts," said Amerland partner Jules Arthur. His group, he said, plans to do "what we think is the right thing and create some affordable housing in a market that we think has some definite demand for it."

According to the CRA, Amerland plans to add kitchenettes to each unit, plus install air conditioning and upgrade wiring, plumbing and elevator systems throughout the building.

In addition, the developer has promised to restore the building's common areas. Windows and skylights hidden long ago by remodeling would be uncovered and restored.

But current owner Martin Yacoobian Sr. said Thursday that "there is nothing definite" about the plans by Amerland to purchase the building.

"The Alexandria Hotel is still owned and operated by us," he said. "Until I see what they are going to do, there is ... nothing definite, nothing for sure."

Arthur said the developers have "contracted to buy the building" but must first secure final financing. The effort won praise from preservationists who said it marked a novel way of preserving the Alexandria without chasing out its residents.

But Becky Dennison of the Los Angeles Community Action Network, a low-income housing advocacy group, raised concerns about whether many of the residents would actually be able to stay. The project's current definitions would require that all tenants have incomes below 60% of area median income, with at least 10% having incomes of below 50%.

Dennison said most of the Alexandria's tenants have incomes closer to 25% or 30% of median area income. She said she worried that the project would displace many of them.

"There really are extremely different ways of doing affordable housing," Dennison said. "If you are going to renovate an occupied building, the CRA needs to ensure that it benefits the people who live there or, at the very least, acknowledge that those folks are going to be displaced."

Financing for the rehab would come from $55 million in tax-exempt bonds issued by the CRA. The developer would pay back the bonds, though details of the financing are still being worked out.

Officials said the tax-free nature of the bonds, along with low-income housing tax credits, make the project viable for Amerland.

In approving the project Thursday, the CRA board set some conditions that could protect many of the building's current residents, maintaining affordability for their units at 30% of their income, lower than the developer had planned.

David Riccitiello, the CRA's regional administrator for downtown, said his agency may have to help the developer secure additional funds to meet those demands.

"We're going to have to really talk to ... all of our partners in the affordable-housing game and package as much money as we can find."

Arthur said his group would work with the CRA and the L.A. Community Action Network to create some units in the building at lower income levels.

"Our goal," he said, "is to make the tenants' lives better. The conditions they are living in now are pretty terrible."

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