The firm proposing to buy and rehabilitate Casa Grande Apartments received a tentative commitment Monday evening for a $2.5 million loan from the Ceres Redevelopment Agency. But members said the action is by no means a guarantee that the funding will be approved.
The CRA loan is one of several funding mechanisms sought by Intercontinental Affordable Housing of Santa Ana in order to proceed with a $23.4 million rehabilitation project of Casa Grande. The apartments were built on Della Street at Whitmore Avenue in 1971. The company wants to rehabilitate the 100 existing units built in 1971 as well as add 34 more units.
Councilmembers acting as members of the CRA board said they are willing to reserve $2.5 million from the pot of affordable housing monies set aside in their budget but that the company will have to make a hard sales pitch.
"I really need to be sold this is a worthwhile project," said Mayor Anthony Cannella, who expressed concern about the life of the apartments and how crime could be reduced coming from the apartments. "There's so much work to be done on this before I approve $2.5 million on this project."
Councilman Chris Vierra also said he won't support the loan until he sees the extent of the rehabilitation.
Jey Samuel, vice president of Intercontinental Affordable Housing, said he wants Casa Grande to remain as Section 8 rents. He said the rehabilitation effort would mean Casa Grande could remain a viable place to live for another 30 years. Some of the work would include new balconies, new heating units, a new roof, new paint and landscaping. The work would come to $32,000 per unit.
As Samuel went into details on the project, Cannella reminded him to make his sales pitch after other funding sources have been approved.
"You're way down the road and we're not even in the car yet," said Cannella.
If approved, the CRA would loan the funds at 3 percent interest and be paid back $1 million immediately after the rehabilitation project is done with the remaining $1.5 million due in 15 years.
Ceres resident Len Shepherd commented that $32,000 per unit seemed "pricey" but asked the CRA to remember the negatives of the low-income complex.
"That place over there is a mess and in my opinion needs to be removed," said Shepherd. "There's a whole lot of criminals living there." He then added that any rehabilitation work would be "like putting a dress on a pig - you've still got a pig."
Councilman Guillermo Ochoa answered later by saying he knows some "good families who live there" and supports the upgrade.
A future study session will be scheduled at a later date with a possible tour of Casa Grande offered by Samuel.
Bryan Briggs, the city's Redevelopment and Economic Development manager, said the CRA will not have much risk. He noted that the CRA would hold the second position on the note behind state agencies. The apartments are being purchased for $15.7 million.
Intercontinental seeks to pay for the work from three funding sources: state bonds, tax credits and CRA funds.
The CRA has a $8 million pot of money called "housing set aside" which is available for affordable housing projects in Ceres. State law mandates that 20 percent of the revenue received by a redevelopment agency be set aside for affordable housing.
The CRA loan is one of several funding mechanisms sought by Intercontinental Affordable Housing of Santa Ana in order to proceed with a $23.4 million rehabilitation project of Casa Grande. The apartments were built on Della Street at Whitmore Avenue in 1971. The company wants to rehabilitate the 100 existing units built in 1971 as well as add 34 more units.
Councilmembers acting as members of the CRA board said they are willing to reserve $2.5 million from the pot of affordable housing monies set aside in their budget but that the company will have to make a hard sales pitch.
"I really need to be sold this is a worthwhile project," said Mayor Anthony Cannella, who expressed concern about the life of the apartments and how crime could be reduced coming from the apartments. "There's so much work to be done on this before I approve $2.5 million on this project."
Councilman Chris Vierra also said he won't support the loan until he sees the extent of the rehabilitation.
Jey Samuel, vice president of Intercontinental Affordable Housing, said he wants Casa Grande to remain as Section 8 rents. He said the rehabilitation effort would mean Casa Grande could remain a viable place to live for another 30 years. Some of the work would include new balconies, new heating units, a new roof, new paint and landscaping. The work would come to $32,000 per unit.
As Samuel went into details on the project, Cannella reminded him to make his sales pitch after other funding sources have been approved.
"You're way down the road and we're not even in the car yet," said Cannella.
If approved, the CRA would loan the funds at 3 percent interest and be paid back $1 million immediately after the rehabilitation project is done with the remaining $1.5 million due in 15 years.
Ceres resident Len Shepherd commented that $32,000 per unit seemed "pricey" but asked the CRA to remember the negatives of the low-income complex.
"That place over there is a mess and in my opinion needs to be removed," said Shepherd. "There's a whole lot of criminals living there." He then added that any rehabilitation work would be "like putting a dress on a pig - you've still got a pig."
Councilman Guillermo Ochoa answered later by saying he knows some "good families who live there" and supports the upgrade.
A future study session will be scheduled at a later date with a possible tour of Casa Grande offered by Samuel.
Bryan Briggs, the city's Redevelopment and Economic Development manager, said the CRA will not have much risk. He noted that the CRA would hold the second position on the note behind state agencies. The apartments are being purchased for $15.7 million.
Intercontinental seeks to pay for the work from three funding sources: state bonds, tax credits and CRA funds.
The CRA has a $8 million pot of money called "housing set aside" which is available for affordable housing projects in Ceres. State law mandates that 20 percent of the revenue received by a redevelopment agency be set aside for affordable housing.
