Condo Developer Seeks Simi Loan : Housing: Builder offers to lower prices on units in exchange for $1 million with no interest. Officials express reservations.

A Simi Valley developer has offered to drop the price of nearly 100 condominiums in a development it is planning for the city’s west end with a substantial hitch--a $1-million interest-free loan from the city.

But some city leaders said they would not be willing to sink city dollars into the project unless it goes further in helping the poor.

Griffin Industries, which wants to build 600 houses in an area called Simi Village, would reserve 96 condominiums for low-income buyers if the city agrees to the loan.

The city’s Affordable Housing Subcommittee, made up of City Council members Bill Davis and Judy Mikels, will consider the request at its meeting today. Davis and Mikels have expressed reservations about the project.

But Rick Niec, vice president of Griffin Industries, said the company would be willing to alter its proposal to address the city’s apprehensions.

Griffin wants to purchase a 45-acre parcel in the Simi Village area south of Los Angeles Avenue between Sinaloa Road and 1st Street to build 600 houses. In exchange for a $1-million, interest-free loan, the developer is offering to drop the price of 96 condominiums to about $91,000 apiece, nearly $35,000 below market value.

Davis criticized the project for not addressing the housing needs of poor residents.

“For a single parent or somebody who is really in need, this is not that great of a deal,” Davis said. “Those are the people we really need to be helping, if we’re going to be using city money.”

Mikels said she would be reluctant to grant an interest-free loan to the developer.

“We have to look at what we’re getting,” Mikels said. “Frankly, I’m not sure there are enough units at enough of a reduction to really have an impact.”

However, Niec said his company is willing to negotiate.

“The meeting may not do anything other than help us focus on the concerns the city has and give us some redirection,” Niec said. “But we want to continue to work toward an affordable agreement.”

In recent years, the city has contributed more than $1.6 million to two housing developments for low-income residents, said Dulce Conde-Sierra, Simi Valley’s deputy director of housing and special projects.

“Requests by developers for city assistance are not unusual these days,” Conde-Sierra said. “In the last few years, we have come to expect large requests.”

One of the city-subsidized projects, the recently opened Heywood Gardens apartment complex for senior citizens, is entirely for low-income residents. Monthly rent on its 75 units ranges from $500 to zero.

The other project, a 22-townhouse development being built by Cabrillo Economic Development Corp., is designed to cater to residents who earn 75% or less of the county median income, about $39,700 for a family of four.

Niec said his company’s project differed from the other two because Griffin is asking the city for a loan, not a grant. He acknowledged, however, that the city could lose up to $180,000 or more in interest if it loaned Griffin $1 million interest-free.

Under the Griffin proposal, the city would lend the developer $1 million to help pay for the purchase of the 45-acre plot. The developer would then build on the land and pay the loan back as housing units were sold.

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The subsidized units, which would be spread throughout the development, would be available to low-income buyers for 30 years, Niec said.

“This is an opportunity for the city to provide, at a very minimal cost, affordable housing for its residents,” Niec said. “We’re willing to be flexible to make that happen.”

Davis said he would be more willing to fund the Griffin project if it were planned entirely for low-income residents.

“If this project were split between rental and low-cost homes for sale, I would look at it a little more sympathetically,” Davis said. “As it is right now, I would say it’s not an outstanding project.”

If the subcommittee approves a proposal, it will be sent to the full City Council for consideration.

FYI

Simi Valley’s Affordable Housing Subcommittee meets today at 5:30 p.m. at Simi Valley City Hall, 2929 Tapo Canyon Road.