Council Starts Bond Process for Project in Westchester

The Los Angeles City Council has approved the first step in obtaining $85 million in tax-exempt bond financing for construction of a 624-unit apartment project on the site of the Centinela Drive-In in Westchester.

To obtain the financing, 20% of the apartment units in the complex must be reserved for people with very low incomes.

Alan Casden, chairman of the Casden Co., said the Los Angeles development firm plans to complete the purchase of the drive-in property from developer George Smart & Associates Friday. Casden would not disclose the price for the land on Centinela Boulevard, just east of the San Diego Freeway.

He said in an interview that the council’s action last week approving a resolution starting the bond-financing process was “very, very preliminary.” He said the move does not necessarily mean that the property will be developed using tax-exempt financing.

“There is no assurance that it will be done that way,” he said. “We haven’t made a decision. We’re investigating financing the project.”

The bond financing program is intended to provide incentives to encourage development of affordable housing.

If the lower-cost bond financing is used for the Westchester project, one out of every five apartment units in the project must be affordable to people whose incomes are less than half of the area’s median income. The restriction applies for 15 years. After that, the rent would gradually increase, reaching market rates after another 25 years.

Rick Ruiz, spokesman for Los Angeles City Councilwoman Ruth Galanter, said a one-bedroom apartment with a market rent of $830 a month would rent for $417 a month to a person who qualified as a “very low income” tenant.

Residents in nearby Ladera Heights expressed concern about low-income units when the apartment complex was being considered by the Los Angeles Planning Commission in October, 1988.

If more expensive conventional financing is used, the project could be built without very low income units and only 10% of the units reserved for people whose income was defined as moderate.