The Los Angeles City Council Friday approved $144 million in tax-exempt bonds to finance construction of 1,279 apartments in Warner Center, despite objections by two council members that private development is being subsidized in an affluent area.
The West San Fernando Valley project would be the biggest to come out of the bond program, begun in October, 1982, and designed to develop rental units for low- and moderate-income families in Los Angeles, said Craig Avery of the Community Development Department. Mayor Tom Bradley still must act on the project, and his approval is expected.
$450 a Month for Apartments
The Casden Co. of Beverly Hills proposes what will be called the Warner Center Apartments on a vacant 29-acre site between Canoga and Owensmouth avenues, and Burbank Boulevard and the Ventura Freeway.
The developers must set aside 20% of the units for 12 1/2 years for low- and moderate-income families. To qualify, a family of four must earn less than $23,050 a year.
One-bedroom units in the Woodland Hills apartments must be rented to qualifying families for $450 a month. Others will pay $750 for the same units.
The council approved the bond issue by a 12-2 vote, with councilmen Ernani Bernardi and Marvin Braude dissenting. Councilwoman Joy Picus, whose district includes Warner Center, was absent.
Braude said making the developer set aside 20% of the units for low- and moderate-income families is "inadequate to compensate the public" for the $70 million in tax benefits the city estimates the developer will receive from the bond issue. The bonds provide developers with a lower interest rate than a conventional bank loan.
"There is a gross discrepancy between the benefits the developer is going to get and the benefits we're going to get in helping poor people," Braude said.
'They're Going to Throw Them Out'
Braude said the city should require the developer to provide more low- and moderate-income housing. "We have not negotiated hard enough," he said.
Bernardi said the city should be subsidizing private development of rental housing in low-income areas, "not in the luxury of Warner Center."
He said that, once the developers fulfill their 12 1/2-year obligation to set aside housing for low- and moderate-income families, "they're going to throw them out and tell them to go someplace else."
But Councilman Dave Cunningham argued that the bond issue is needed to encourage housing for the poor outside of his heavily low-income South Central Los Angeles district.
"Warner Ranch shouldn't be only for the rich," Cunningham said.
Cunningham, chairman of the council's Grants, Housing and Community Development Committee, said the developer, as a condition of receiving bond financing for the Warner Center project, has agreed to build 162 units in the predominantly low-income inner city and another 222 units in the central city. If the housing is not built, the developer must pay the city about $2.9 million for construction of additional low- and moderate-income units, he said.
Alan Casden, president of The Casden Co., said construction of the Warner Center Apartments would get under way late this summer, with the first units open in the summer of 1986.
Avery said the bond program is to be eliminated under President Reagan's tax reform plan. He said the Warner Center project would not be affected, however, because it would begin before tax reform, if approved by Congress, goes into effect.
The council also approved $3.6 million in tax-exempt bonds for 55 rental units--20% of which must be available to low- and moderate-income people--at 6722 Independence Ave., south of Vanowen Street in Canoga Park.
6,800 Units Financed
Since the bond program began, it has financed 6,800 units throughout Los Angeles.
The bonds are sold publicly and paid off by developers with rental income from the apartments. Although the city does not guarantee payment of the bonds, Doug Ford, general manager of the city's Community Development Department, said he knows of no case in which bondholders have not been paid.