Agency OKs 2nd Loan in Year to Sun Valley Housing Project

For the second time in a year, the Los Angeles Community Redevelopment Agency has offered to provide an additional loan to keep afloat a long-delayed proposal to build a 241-unit housing project in Sun Valley for low- and moderate-income families.

By a 3-0 vote, a City Council panel Monday approved a CRA request to boost its loan to Brentwood developer Thomas Safran by 28%--from $5 million to $6.4 million. The decision still must be approved by the full council.

Now in its fifth year of planning and expected to cost $24 million, the project is to be built on a nine-acre plot on Strathern and Lorne streets between Fair and Vineland avenues in Sun Valley. Safran said he was encouraged to build the project by Howard Finn, the area’s councilman until his death in 1986.

The project is intended to house 500 to 600 people, Safran said in an interview. Low-income or very low-income families will be entitled to rent 49% of the units for from $300 to 600 a month, depending on the number of bedrooms, Safran said. The remaining units will be available to moderate-income families for $550 to $850 a month.

Safran has already built a 93-unit apartment complex, called Strathern Court, across the street from the Strathern-Lorne site. The earlier project is for low-income persons eligible to receive federal rent subsidies.

Safran told the council’s Community Redevelopment and Housing Committee on Monday that the Strathern-Lorne project should be ready for occupancy in a year.

John McCoy, CRA director of housing, applauded the project as a “major source of low-income and very low-income housing for the city.”

The original $5-million CRA loan, OKd by the council in March, 1989, saved the project, said Ralph Esparza, an assistant director in the city’s Community Development Department. That loan was needed after it was discovered that a $5.2-million federal Housing Development loan, obtained by Safran with city sponsorship, was insufficient.

“This project has been like the two-step cha-cha--two steps forward, one step back,” Esparza said.

The $1.4 million in extra loan financing is needed because of several new factors, including passage of a new city fire sprinkler law that added $480,000 in extra costs and a $100,000 increase in park fees to be paid by the developer.

Safran said the project has been particularly complicated because it involves three lenders--a private bank, the CRA and the federal government--in addition to a group of private investors from Boston who have put up $7.8 million in equity capital in hopes of reaping major tax-credit benefits with their investment.