Condo Plan Angers Some in O.C.

The planned conversion of an apartment complex to condos in Anaheim’s Platinum Triangle is angering low-cost-housing advocates and some City Council members who say the emerging high-rise neighborhood will price out many service-sector workers and young professionals.

Condos will make up 90% of the 9,500 residences slated to be built in the area around Angel Stadium. But if the City Council approves the conversion of the Stadium Lofts apartments to condos -- as expected tonight -- the number of rentals projected for the area would be cut nearly in half.

The looming loss of hundreds of apartments underscores the shortage of low-cost housing planned for the district and will do nothing to alleviate the city’s low-cost-housing crunch, said Anaheim Councilwoman Lorri Galloway.

“Where does this put all the upwardly mobile business people, young couples and people that can’t afford medium-range houses?” Galloway said. “We have this master-planned urban community, but I don’t want it to be exclusively for people who can afford market-rate housing. Then it becomes something that’s unreachable for most people.”

Although the move by the Stadium Lofts developer has enraged Galloway and Councilman Richard Chavez, they don’t appear to have the votes on the council to block the conversion to condos.

San Diego-based Windstar Communities said its switch -- only months before the complex’s planned June opening -- was driven by the hot condo market in Los Angeles, San Diego and Irvine and the fact that more than half the 1,500 inquiries about the project came from people who wanted to own rather than lease.

Real estate analysts say a wave of condo conversions is sweeping Southern California and that Windstar Communities simply reached the same conclusion that other developers have: Condos will yield 30% to 40% more profit than apartments.

“The huge run-up we’ve had in the housing market has been driving up land prices,” said Delores Conway, director of the Casden Real Estate Economic Forecast at the USC Lusk Center for Real Estate. “And construction costs have also been going up. So to make these projects pencil out, it makes a lot more sense to sell condos.

“Even if rents were to go up 10% a year, it would take developers up to 10 years to achieve the same profits that they could attain by selling the apartments as condos.”

When Windstar Communities became the first developer to commit to the 807-acre former industrial area three years ago, the Platinum Triangle was merely a concept. Now it promises to provide Anaheim with a focal point: an urban village mixing high-rise buildings, lofts, restaurants and storefronts linked by pedestrian-friendly avenues.

The 390 luxury apartments at the Stadium Lofts, which sit within eyeshot of Angel Stadium at Katella Avenue and State College Boulevard, were going to lease for $1,100 to $3,000 a month.

If the City Council approves the new plans at tonight’s meeting, the condos could hit the market in May for $300,000 to $700,000.

“We weren’t even sure there was a market for apartment rentals,” said Eric Heffner, a principal at Windstar. “It was all industrial buildings down there. But in the last six months, you can feel the shift. All these other developers, like Lennar, have come into the area and given us confidence that condos can sell.”

Considering the land prices in the Platinum Triangle, Anaheim Mayor Curt Pringle said he understood the logic behind Windstar’s move.

“They took a lot of risks,” Pringle said. “They were unclear what the total evolution of the district would be. So now that the picture of the Platinum Triangle is a lot clearer, the developer is changing their product mix to match that.”

But officials with the Kennedy Commission, a nonprofit Orange County group that advocates low-cost housing, say they worry that the Platinum Triangle will become another Anaheim Hills, an upscale enclave in east Anaheim.

“You don’t want to segregate the community in that fashion,” said Cesar Covarrubias of the Kennedy Commission, “especially adjacent to all the service jobs in that area, with Angels Stadium, the Arrowhead Pond and Disneyland.”

In 2004, the Kennedy Commission reported that 48% of the city’s 175,000 jobs came from the low-wage service and retail sectors and that 57% of jobs in the city paid less than $16 an hour. The same report noted that a worker had to earn more than $23 an hour to afford the average monthly rent for a two-bedroom apartment in Anaheim.

Anaheim last year adopted a low-cost-housing plan that set a goal of creating 1,200 new low-income rental units over four years. The plan materialized after Chavez and Galloway raised objections to the absence of low-cost housing as Platinum Triangle projects were being approved.

Pringle, along with Councilmen Harry Sidhu and Bob Hernandez, did not share Galloway and Chavez’s concerns about the lack of low-cost housing in the Platinum Triangle.

“We’re very committed to affordable housing, but affordable housing isn’t going everywhere, just as high-end housing isn’t going everywhere,” Pringle said.

“Unfortunately, the Platinum Triangle is the most expensive property in all of Anaheim,” he said.

The city has kicked in millions in redevelopment money and provided developers with incentives in the hope of attaining its low-cost-housing goal elsewhere in the city, said Anaheim Planning Director Sheri Vander Dussen. Because of land and high-rise construction costs, the city would have to spend three times as much in the Platinum Triangle to subsidize a low-cost unit, she said.

“It’s a waste of taxpayer money to use those dollars in an area that’s so expensive,” Pringle said. “I want to make the public investment where we can maximize the benefit for families.”

He said the 9,500 housing units envisioned for the Platinum Triangle are exactly what Anaheim needs, emphasizing that the city added only 6,400 residences in the 1990s while adding 67,000 people.

But Chavez said the Stadium Lofts’ transition to condos pointed up a glaring mistake by the council. “Let’s not blame the developer of this project for not building enough affordable housing,” he said. “I believe the blame lies at the foot of the council. We’ve created an area that’s not truly diverse. It’s a missed opportunity, something that will affect us forever.”