FULLERTON : Council OKs Loan for Low-Rent Hotel

The city moved a step closer to building its first hotel for low-income, single people this week when the City Council agreed to negotiate a multimillion-dollar construction proposal with a Costa Mesa developer.

The city’s redevelopment agency agreed Tuesday to lend $1 million to Urban Communities/San Gabriel Partners to build a 112-unit hotel for people who earn less than $17,000 per year. The project’s cost is estimated at $4.5 million.

“We’ll be breaking ground this summer and occupying next February,” said Kaleb Nelson, leader of the development group. Rents at the hotel, slated for construction at 224 E. Commonwealth Ave. in downtown Fullerton, will average $326 per month, he said.

Each one-room apartment would contain a toilet, sink, refrigerator, microwave and small stove as well as a bedroom area.

Councilman Chris Norby, the lone dissenter in the 3-1 vote, noted that the developer still has not acquired the land for the hotel.

“I wouldn’t hold my breath on it,” Norby said.

Norby favored local developer Tony Bushala for the job, saying he did not trust an out-of-town developer with few community ties to build and operate a hotel that will be reserved for low-income residents for the next 55 years.

But other council members felt that Urban Communities was better prepared to handle the project and could move more quickly to the construction stage.

The city has been actively promoting low-income housing after settling a 1992 lawsuit that charged the city’s redevelopment agency with not spending any money on housing projects for the poor.

“We changed our redevelopment priorities to address this issue until we got caught up,” said Gary Chalupsky, executive director of the Fullerton Redevelopment Agency.

Fullerton would become the third city in the county with a single-room-occupancy hotel. Costa Mesa has such a hotel, and the Irvine City Council last week approved a proposal to build one.

Fullerton’s redevelopment agency is involved in nine other affordable-housing projects. Beneficiaries would include families and senior citizens, Chalupsky said.

Studio apartments for single people, however, are in especially high demand, Nelson said.

Nelson’s group conducted a market survey to determine the need for hotel rooms and found that computer operators, grocery checkers, security guards, waitresses and locksmiths would be likely occupants of the apartments, Nelson said.