Council Votes to Approve New Loan for Developer
The Los Angeles City Council voted Tuesday to lend a developer an extra $600,000 to help pay for cost overruns in the Bryant Street-Vanalden Avenue redevelopment project in Northridge.
The 12-0 vote sent the proposed loan to Mayor Tom Bradley, who is expected to give his approval.
“It is something we needed to do to make sure the project keeps going forward,” Councilman Hal Bernson said of the loan. Bernson has been a major supporter of the $29.4-million project, which is in his district.
The council in December, 1986, voted to issue $20.6 million in tax-exempt bonds and lend $4.2 million to developer Devinder (Dave) Vadehra, who has invested $4 million of his own to buy and renovate up to 46 apartment buildings in the blighted Bryant-Vanalden area.
Vadehra, in asking the city last month to lend him $600,000 more, said a number of problems have driven up the project’s cost.
One major problem, he said, was that he found 4,000 tenants--1,000 more than estimated--crowded into the 453 units. As a result, he has had to wait longer than expected for units to become vacant and--as a result--has been forced to extend the contracts of workers, he said.
Vadehra said he also has had to make more repairs than expected.
Bernson said the loan poses no financial risk to the city because it is guaranteed by a letter of credit from the developer.
Under terms of the proposed loan, Vadehra will be required to repay the city at an 8.5% annual interest rate over 3 1/2 years. He proposes to repay the city from the higher rents that will be charged to tenants of renovated units.
At a council hearing earlier Tuesday, Eugene Hernandez of the San Fernando Valley chapter of the Mexican-American Political Assn. complained that repairs to apartments have been made “at the cost of the dignity” of the predominantly low-income Latino tenants. He said, for example, that workers have entered apartments while female tenants have been in the shower.
City officials did not respond to Hernandez’s complaints. However, representatives of the developer have said that after tenants complained about invasion of their privacy, renovation of occupied units was halted until work on the vacant units is completed. Once the vacant units are finished, workers will renovate the occupied units after giving tenants proper notice.
So far, 145 of the 453 units have been renovated. City officials expect the project to be completed on schedule in September.