ORANGE : Developer Hired to Restore Apartments

City officials are betting $7 million that a blighted apartment complex here will soon be a model of attractive, affordable housing.

The City Council this week approved hiring Forest City Development in Los Angeles to transform the 260-unit Villa Santiago apartments from what police and residents say is a magnet for crime.

“The nicest thing that could be said about these apartments is they are a dysfunctional living environment,” Mayor Joanne Coontz said.

Weeks of negotiations between the development company and city officials resulted in a deal in which Forest City will spend $27 million to acquire and rehabilitate the apartments. The cost would include $4.5 million to relocate about 1,000 people now crowded into about 130 two-bedroom apartments, said Jack McGee, the city’s director of community development.

The city agreed Tuesday to provide $7 million in redevelopment funds to the project, contingent on the developer keeping the units “affordable” for 55 years.

Based on median wages in the area, rents for the remodeled apartments would be $762 a month for a two-bedroom unit, excluding utilities, McGee said. A family of four earning no more than $35,000 a year would qualify as tenants, he said.

Council members expressed relief at having reached an agreement on rejuvenating the apartment complex, which was the scene of a highly publicized raid by the Immigration and Naturalization Service in 1989 and has been a source of numerous calls to police and code enforcement officers.

Councilman Dan Slater, who helped negotiate the deal with Forest City, said the city’s contribution will be about $27,000 a unit, “the lowest we have ever spent on any Redevelopment Agency project.”