FULLERTON : Hotel Will Become Market, Apartments

An Anaheim Hills grocer and developer was awarded a city contract to restore the dilapidated Allen Hotel into low-income apartments and a meat and fish market.

In a 3-2 vote Tuesday, City Council members selected Jose Zepeda over another developer, who had proposed a more dense project that would have converted the historic building into smaller, single-room-occupancy (SRO) units.

Several council members praised the proposal by Zepeda, who has completed similar projects in Placentia and Los Angeles. Some council members also said that they had doubts an SRO project would work at the site.

“SROs may have a place, but I have not seen it (for this site),” Councilman Richard C. Ackerman said. The low-income apartment complex, he said, “is much more compatible to the neighborhood.”

Zepeda’s plans call for converting the building’s ground floor into a grocery and meat market and the upper levels into seven low-income apartments, each of which could hold up to two adults and two children. He also plans to expand the structure by building eight additional units on a vacant parcel just to the north.

The hotel, south of the Santa Fe Railway on Harbor Boulevard, was built in 1924 to serve transient and railway workers. By the 1980s, the site had fallen into disrepair and was regarded as a flophouse.

The city already has spent nearly $700,000 to buy the 1-acre site, relocate tenants of the flophouse and pay interest payments since it was bought in the late 1980s.

Mayor Chris Norby and Councilman Don Bankhead favored the project of developer Robert B. Gilbert Jr., who proposed converting the building to 72 low-income, single-room-occupancy units. His plans also called for adding third and fourth floors on the north and east sides of the hotel.

“This is an opportunity to get affordable housing,” Bankhead said. With the Gilbert proposal “the city is certainly getting much more for its money,” he added.

Rents in Gilbert’s project would have been $325 to $400 a month, while Zepeda plans to charge tenants $450 to $500 a month.

Several residents who live near the hotel also said they favored Gilbert’s project, arguing that the apartments would not be a good place for children to grow up.

Several nearby business owners complained that Zepeda would be getting a city subsidy to finance a meat and fish market that would compete with two other grocers within several blocks.

“The neighborhood can only support so many of those,” Norby said. “I think one is going to go out of business.”

For his project, Zepeda will need $68,500 in seismic and rehabilitation loans, a $120,000 one-time rental subsidy, $50,000 for utility relocation and upgraded curbs, gutters and fire hydrants and $175,000 for acquiring an adjacent home and relocating its tenants to make room for additional parking.

Susanne Warren, a member of Fullerton Heritage, said that both projects would infringe on open space because they call for expanding into a grassy, tree-shaded area that serves as a small park for some neighborhood residents. But city officials say the area would be landscaped with trees and meandering sidewalks.

“We have ‘looking-at’ space,” Warren said. “But ‘looking at’ space is not the same as space for community use.”