Council Picks Village Developer

By Gene Williams
Staff Writer

January 11 -- The City’s ambitious redevelopment plan for the Civic Center took another step forward Tuesday night with the selection of the contractor that will head up construction of 325 new housing units near City Hall.

Related Companies of California, a big-time developer with projects in ten cities and counties across the state, was the unanimous choice of the City Council over two other firms for the contract to build the “Civic Center Village.”

Of the three finalists, Related was the only company with plans that delivered the 325 units council had asked for -- nearly half of which will be apartments set aside for affordable housing -- and it did so with the least amount of tweaks to the council’s guidelines.

But design wasn’t the only consideration behind the decision.

“Their proposal was excellent and, perhaps more important, financially feasible,” Jeff Mathieu, the City’s resource manager, told the council before the vote.

In addition to the company’s understanding of real estate and housing markets, Mathieu said, “they offered the most compensation to the City as a residual value at the end of the development.”

A major selling point in the deal for the City is that Related agrees to acquire the land through prepayment of a long-term lease. The other design teams competing for the project -- Castle & Cook and Bridge/BRE -- would have required the City to sell them title to the property.

Related officials say they expect to pay the City something in the neighborhood of $35 million to $40 million for the lease. Out of that money, the City says it expects to net between $14.4 million and $22.8 million.

During Tuesday’s hearing, only about half of the more than a dozen speakers who had signed up to testify on the subject stuck around for their turn at the mike. The overriding concern of most of those who spoke was to keep building heights down.

“You’re caught in a difficult situation,” Arthur Harris told the council, “between a public that doesn’t want more height… and the people who want more low-cost housing.”

Voicing an opinion that has been echoed by others, Friends of Sunset Park president Zina Josephs said she would opt for a few less housing units if it meant lower buildings.

“We’re living in paradise, so please don’t muck it up,” Josephs said.

In a question to Josephs from Council member Herb Katz, it was noted that 298 units -- 27 less than the target number -- could be achieved under proposals that stayed within the 56 foot height limit set by council in the Civic Center Specific Plan -- a document adopted six months ago. (see related story)

At least one other resident questioned the need for any housing to be built in the Civic Center.

“I had no idea it was going to become housing,” said Lorraine Sanchez, adding that she thought others probably didn’t know either.

Sanchez suggested that parks and public facilities would be a better use for the land. Room for housing could probably be found elsewhere, she said.

But Council member Ken Genser replied that the City was committed to build the units since the land was bought from RAND Corporation with money earmarked for affordable housing.

“It was the only way we could buy this land,” Genser explained. “We had no alternative.”

Genser went on to say that theoretically those affordable housing dollars could be bought out with money from elsewhere.

Even so, he said, the City, under its obligation to State law, would still have to find someplace to put affordable housing -- a problem he’s seen other Cities face.

“They’re constantly looking with brokers to buy places to put affordable housing and they can’t find any,” Genser said.

While planning is still in the early stages and nothing is set, it is expected that an option will be explored to allow some buildings in The Village to go up to 65 feet -- one story higher than project guidelines -- to reach the target of 325 units.

The public will have opportunities to weigh in on this and other ideas at meetings that are expected to kick off soon, and details of what actually gets built will be hammered out.

After Tuesday’s hearing, Related of California president Bill Witte said he is happy with the clear direction his company has gotten from the City so far and looks forward to the next step.

“Obviously, we are very pleased to move forward and start engaging the community as part of this development process,” Witte said Wednesday.

In addition to The Village, the Civic Center Plan calls for new parks, an extension of Olympic Drive to Ocean Avenue, an early childhood development center, an annex to the Civic Auditorium and 100,000 square feet of additional space for City Services on the 13-acre site purchased for $53 million.