THOUSAND OAKS : City OKs Bonds for Housing Renovation

Tempted with the promise of affordable housing and a large cash payment, the Thousand Oaks City Council agreed to issue $66.7 million in bonds to a real estate company seeking to buy and renovate three of the city’s oldest apartment complexes.

In return for the bonds, R & B Realty Group has offered the city $750,000 to support future affordable housing projects. The bonds provide a lower interest rate, but require the developer to set aside one-fifth of the apartments at the Biltmore, Pavilion and Oakview complexes for low-income tenants.

The cash payment, which will come from the bond proceeds, is an unusually large sum of money for the city to receive through such a deal, said Mark Young, a financial adviser to the city.

“In our opinion, this is the most significant amount on a percentage basis and a dollar basis that any city in the state has gotten for [such an issuance],” he told the council Tuesday night.

Before the deal can go through, it must be approved by the California Debt Limit Allocations Committee.

To meet state and federal regulations for the bonds, R & B had to agree to reserve 20% of the apartments’ 804 units as low-income housing and dedicate at least 10% of the bond money to renovations. Residents already living in the apartments will be given priority for the new low-income units.

Some council members expressed concern that the renovations would result in rent hikes for residents who did not qualify for the low-income apartments.

“My concern is for the current tenants,” Councilwoman Elois Zeanah said. “If their rent is raised because of what is essentially a face lift, it may in essence be a de facto eviction because they can’t afford it.”

But Christopher Cheatham, director of investments for R & B, assured the council that the regular apartment rates would go up only slightly, in accordance with the market rate.

R & B Realty, whose interest rate on the bond will be 1.5% lower than the market rate, has said it will provide new cable service for residents and look into increasing security at the buildings.

If the bonds are approved by the state in October, all three apartment complexes will receive new roofs, landscaping and paint as well as internal improvements such as new appliances, carpets and bathroom fixtures.