BREA : City OKs Lots Sale for Affordable Units

Sitting as the Redevelopment Agency, the City Council has approved the sale of city-owned lots to developers for an affordable housing project at the corner of Birch Street and Laurel Avenue.

By approving the sale to George and Carol Taunton on Tuesday, the council hopes to boost the city’s affordable housing stock and meet the increasing needs of the community, officials said. The council approved the deal 4 to 0, with council member Carrey J. Nelson abstaining.

Twenty of the 25 condominium units to be built will be set aside for very-low-income to moderate-income families.

Under an agreement between the Redevelopment Agency and the Tauntons, the agency will buy two parcels owned by the Tauntons at the project site, totaling 14,000 square feet, for $595,000.

The agency will then “assemble” the land with four adjacent city-owned lots to bring the six parcels to 40,600 square feet with a fair market value of $668,940, according to Redevelopment Services Director Susan Georgino.

Georgino said the “assembled” property will then be sold to the Tauntons for between $265,700 and $365,700, under a practice called “land write-down,” which is permitted by state redevelopment law.

“This is not a gift of public funds,” said Mayor Burnie Dunlap. “The only way to lower the cost of development to the level for affordable housing is to ‘write down’ the land value.”

Construction will start in April or May and will be completed by February, 1994, according to George Taunton, a captain in the Brea Fire Services Department, who has been in the development business for 30 years. One of his projects was the Laurel Creek apartments located close to the proposed project site.

“It took three years to get this project going,” George Taunton said. “Hopefully, families who have relocated from Brea can come back.”

Once completed, the project, to be known as Birch View, will have five three-bedroom units, which will be sold at current market rates of $165,000 each. Of the 20 affordable units, costing $150,000 each, 14 will be sold to buyers earning between $38,600 and $63,350 annually.

One unit will be sold to a buyer earning between $26,350 and $38,600 annually and five to buyers earning under $26,350 annually.

Qualified Brea residents who have been displaced by redevelopment projects will have the first crack at buying the units.

The project will cost the agency about $1.3 million, including relocation expenses for three households currently renting in one of two homes on the site, Georgino said in a report to the council.

However, she said the net cost, estimated to be between $563,108 to $663,108, is consistent with similar projects by nonprofit organizations, according to a recent study, which showed the agency would spend about $639,000 if it were to build the same 20 units without a developer.

The Tauntons are allowed a profit margin of 8.3%, which is below the typical developer’s profit of between 12% to 15%, Georgino said.

However, William Vega, who describes himself as a political activist, said that while the project is good, it showed the council members’ “preference” for their friends.

“I feel this is what a friend of the council will get,” Vega said. “You get the good project when you are on the good side of the track.”