LAKEPORT ? City council denied a developer”s loan request to purchase property for a 62-unit affordable multi-family housing project at their meeting Tuesday.
Scott Johnson of Terra Partners has worked with Lakeport city staff for 16 months to develop the project.
He came before the city council seeking a $600,000 loan from the city”s redevelopment agency to purchase the $588,000 five-acre property, located at 1075 Martin Street crossing Bevins Street. The project would cost a total of $18.5 million to build.
“With the redevelopment and growth taking place in the city, new low-income housing will be desperately needed,” Johnson said.
In June the council voted to set aside funds for the loan after noting the city”s obligation to spend money on affordable housing. State law mandates cities spend 20 percent of redevelopment funds on affordable housing.
That translates as 367 subsidized housing units for Lakeport from 2003-08. So far, community development director Richard Knoll estimates the city has 150 units.
“We have affordable housing?Lakeview on Bevins, Sunshine Manor on Lakeshore, the South Forbes project, Hartley Road?but they have to be owned by non-profits with affordability agreements in place to be considered part of the 20 percent requirement,” Knoll said.
Council members were hesitant to approve a loan because the redevelopment agency has just $485,235. Although they predict redevelopment agency revenues of $179,000 in fiscal year 2007-08, city manager Jerry Gilham advised the council against acting too hastily, citing risks involved with the loan and a budget still carrying a $1.5 million deficit. “We do have an obligation to do something, but it”s premature to take the first piece of money that we have and buy these apartments. If you look at our deficit, we should use those monies to create jobs, rather than housing first. We need to create a mechanism to resolve our economic situation,” Gilham said.
Johnson said, “That 20 percent is set aside for production of affordable housing, not capital improvements.”
According to Johnson, additional sources of funding for the $18.5 million project would have come from state and federal grants, tax credits, fee waivers and deferrals. A provision of the loan he requested from the city would have deferred loan repayment for 55 years.
“It”s a risk to be the first one to fund this project,” Knoll said. He said if the developer defaults on the loan the property would then have to be sold by the city.
Councilman Jim Irwin said he could not approve a loan with such a delayed repayment. “That”s all the money we have in that fund, I don”t think putting it toward that project is the way to go,” he said.
Councilman Bob Rumsfelt disagreed. “Hopefully, with our growth in the community we will have a lot of new jobs that are entry level. We should be encouraging people who are willing to come to our community to take those jobs and build them low-income housing. We better start thinking of this now because this project takes years. We would be remiss to let this pass us by,” Rumsfelt said. Mayor Roy Parmentier asked if there was any way the housing could be strictly for citizens of Lakeport. “Do we want people from Oakland coming here? I don”t think we do,” Parmentier said.
Knoll said it is not possible to create housing exclusively for Lakeport citizens, but that there are ways to help facilitate Lakeport residents moving into future projects.
“When we do create more units we can work with local businesses and agencies to ensure those residents are informed,” Knoll said.
Contact Elizabeth Wilson at ewilson@record-bee.com.
