Pasadena OKs Rescue Plan for Seniors’ Units
The Board of Directors has approved a tentative plan to buy and repair the troubled Concord-Pasadena Apartments for $1 million in an effort to save its 150 units of low-income housing for the elderly.
The decision, which won the unanimous support of the board on Monday, allows the city to complete negotiations with the nonprofit Retirement Housing Foundation (RHF) to jointly own and manage the senior citizens apartment complex on Cordova Street.
Under the tentative agreement, RHF would lease the complex from the city and be required to reserve it for low-income elderly or handicapped people for the life of the lease.
Mayor John Crowley said the plan would protect a significant source of housing that has been jeopardized by the financial problems of its current owner, the Concord Senior Housing Foundation.
“We have nothing to lose and everything to gain,” he said. “It’s a great opportunity for us.”
Clements Gordon, a 12-year resident of the Concord-Pasadena and a tenant leader, hailed the plan as a chance to bring stable ownership to the facility after years of financial turmoil.
“I’m all for it,” she said. “We’ve all been through a lot.”
The plan still faces many hurdles, including approval of the city’s proposal by the U. S. Bankruptcy Court, which is overseeing the complex litigation concerning the Concord Senior Housing Foundation.
The foundation is part of the empire of Glendale minister William McBirnie and his nationwide Community Churches of America, which have become mired in litigation and debt.
Crowley said the city and RHF may have to compete with other organizations interested in bidding to purchase and operate the facility. The Bankruptcy Court may choose a proposal that provides more financial benefits to the creditors involved in the proceedings. .
But Crowley said the city offers a greater degree of stability and credibility, which may be enough to give its proposal the edge.
Crowley said the city estimates that it will take an offer of $500,000 to $700,000 to take the property out of bankruptcy proceedings. If the proposal is accepted, RHF would assume the mortgage payments to the federal government.
It would cost another $300,000 to $500,000 to rehabilitate the building, Crowley said, adding that all the estimates are “extraordinarily crude” at this point.
The Retirement Housing Foundation, which is affiliated with the United Church of Christ and operates more than 100 similar facilities around the country, would lease the property from the city and make the mortgage payments.
The foundation runs two low-income senior citizens complexes in the city, Pilgrim Tower East and Pilgrim Tower North.
The foundation would be paid for operating the facility through rents and rent subsidies provided by the U. S. Department of Housing and Urban Development. HUD has established the fair-market monthly rent at the building at $316 to $382. The 160 tenants pay 30% of their income and HUD subsidizes the balance, if necessary.
Crowley said the lease would run to at least 2016, when the federal mortgage that funded the construction of the complex in 1966 is paid off.
The 14-story building carries a 50-year mortgage at 3% interest provided by HUD for the specific purpose of providing low-income housing for the elderly.
Once the mortgage is paid off, the city could use the site for another purpose, such as a cultural center or city offices.
The Concord-Pasadena is in the same block as the Civic Auditorium and the Convention Center, opening the possibility that the city would eventually control almost an entire “superblock” in the heart of downtown, Crowley said.
He said the tenants would be relocated to other low-income housing complexes before the city converted the site to another use.
‘Deal Is Done’
The city must still negotiate the details of the proposal and draft a contract with RHF. But James Shaner, vice president of research and development for the Long Beach-based Retirement Housing Foundation, said: “Conceptually, the deal is done.”
The Concord-Pasadena has been in financial trouble since 1982, when the Concord Senior Housing Foundation decided to pay off its federal loan, more than double the tenants’ rent and put the building up for sale for $6.8 million--$3 million more than it paid HUD.
The foundation had purchased the complex in 1979 with the stated intention of keeping it for low-income housing for the elderly.
McBirnie wrote to the tenants in 1980: “Our motive is quite easily understood. It has long been our conviction that part of the church’s natural responsibility is to help retired and senior-aged folks.”
But in 1982, the foundation apparently changed its mind. The manager of the complex told prospective tenants that they would not receive rent subsidies from HUD.
The tenants successfully sued in federal court to retain their housing and rent subsidies.
The foundation, along with two other McBirnie-founded groups, California Graduate School of Theology and Community Churches of America, have filed for protection from creditors under the Bankruptcy Code.
McBirnie has said he no longer controls the organizations and is not responsible for their finances. He resigned as senior minister of the United Community Church in Glendale in 1986.
McBirnie became senior pastor at the United Community Church in the early 1960s, and a decade later was presiding over a multimillion-dollar empire, partly because of his charismatic presence and a nationally syndicated radio show on which he preached anti-communist sermons.
His empire began to crumble when 26 former parishioners sued him in 1984 for not repaying loans.
In January, a U. S. District Court of Appeals upheld a $1.2-million award against McBirnie and five McBirnie-founded organizations for defrauding the former parishioners through bad loans, said Christ T. Troupis, the attorney for the 26 former parishioners.
The case was appealed to the U. S. Supreme Court, which refused to hear the case in October, Troupis said. With interest, the $1.2-million award has grown to $1.5 million, he said.