HUNTINGTON BEACH : Council Rescinds Apartment Contract

In a surprise move late Wednesday night, the City Council voted 4 to 3 to rescind a acontract it had awarded Monday night for low-cost housing on Utica Avenue.

The contract called for giving Associates Nine a $100,000 grant and $446,000 in a forgivable loan. The firm pledged to rehabilitate an apartment complex at 725-733 Utica Ave. and dedicate it for low-cost housing.

Councilman Dave Sullivan on Wednesday night persuaded the council to rescind its previous unanimous vote for the contract. Sullivan argued that questions had been raised about the apartment complex owner and that a new hearing on the matter should be held. By a split vote, the council agreed, rescinded its approval, and scheduled a new vote for April 18.

The proposed loan would have been forgivable if the private owner kept the units geared to low-income families during the 30 years. If the owner changes rental policies without city approval, the balance of the loan becomes due.

Resident Barbara Kimbrough protested during public comments on Monday night, criticizing the apartment owner for allegedly allowing the complex to become blighted over the years. She said the council should not reward the private owner with “a gift” for rehabilitation of the apartment complex.

But city housing officials urged the council to approve the loan and grant. The city staffers noted that Huntington Beach is under pressure of state law to get more housing dedicated to low-income families. The Utica Avenue proposal would bring 36 units of low-income housing without causing neighborhood disruption, the city staffers said.