FULLERTON : Building Up a Gratifying Investment
Developers are likely to drive along South Harbor Boulevard, astonished at all the new shopping centers and office buildings that have helped revitalize the area.
Not Jose Zepeda. What caught his attention was the Allen Hotel, a dilapidated former flophouse just south of the Santa Fe Railway tracks. The building has been boarded up for nearly five years, and graffiti marks many of the walls.
The Anaheim Hills resident is seeking City Council approval to acquire the 6,500-square-foot hotel, renovate it for nearly $1.2 million and rent the units as low-income housing.
The two-level hotel renovation would mark the fifth time Zepeda has redone a historic structure for low-income housing, an investment that could take a decade to pay off. Family members have called him a little crazy, Zepeda says, but he feels that the risk is worth it.
“If I buy a piece of land and build on it, nobody could care less,” said Zepeda, 45. “But the historic buildings are gorgeous. It takes a lot of guts, a lot of knowledge, to make one of these white elephants work.”
The structure, originally called the Hotel Deluxe, was built in 1924 primarily to serve transient and railway workers who needed a cheap place to stay, according to local history records.
Through the years, the building has housed a pool hall, market, an appliance and furniture store and an adult bookshop. In the late 1980s, the city’s Redevelopment Agency bought the property and building for $400,000, hoping to find a developer to restore the structure.
Last month, a special city committee chose Zepeda’s project, subject to the approval of the City Council on Nov. 5.
Zepeda’s plans call for converting the building to six apartments of about 450 square feet each and a penthouse of about 400 square feet, including new bathroom and kitchen facilities. A 4,500-square-foot addition will be constructed to the north of the hotel, making room for another eight units.
Zepeda said the building also will try to cater to small families who can only afford $400 to $500 a month for rent. Demand for such units is heavy, Zepeda said, noting that he filled nine units in his newly restored Kraemer Building in Placentia in less than two days earlier this year.
At the Allen site, Zepeda also plans to construct a street-level Mexican market, which would be his fourth in Los Angeles and Orange counties. He calls them “Spanish-speaking” markets, as much for their ethnic foods as their locations next to areas that have a dense Latino population.
“I grew up with the markets,” Zepeda said. “The Spanish, they love to live close by. . . . They can get everything right there.”
Zepeda’s restoration plans will include restoring the hotel’s brick facade, arched windows and front entrance transom. The brunt of the work could be in installing new plumbing and electricity, along with a new roof and possibly extra support beams, he said. The building will be reinforced to make it seismically safe.
The addition will be constructed to resemble the historic hotel structure, built of a wood frame with a veneer brick facade, said Mike Frazier, a Yorba Linda architect who also designed Zepeda projects in Placentia.
“It’s a lot of money (to invest), there’s not a lot of return on the investment, but there’s a lot of return in gratitude,” Zepeda said. “If you give them a good product, people tend to respect it, and you respect them.”
