Bonds Will Finance Apartment Repairs

More than $7 million in municipal bonds will be used by a private developer to purchase and renovate a deteriorating apartment complex on Bixby Avenue.

The City Council this week approved the issue of $7.25 million in tax-exempt bonds, with the funds to be used by developer CT-Malabar Ltd. to buy and remodel the 126-unit Malabar Apartments.

Deputy City Manager Catherine Standiford said all payments and liabilities on the 30-year bonds will be guaranteed by the developer.

The city’s only involvement will be obtaining tax-free status, which makes the notes attractive to investors, according to Standiford.

The Malabar complex on Bixby Avenue between Brookhurst and Gilbert streets comprises 12 buildings with one-, two- and three-bedroom units.

Standiford said that by issuing the bonds, the city can set long-term occupancy and property maintenance requirements for the developer without assuming any financial responsibility for the property.

“We’ve had an interest for a long time in ensuring that owners of multifamily properties are responsible owners who maintain their properties well and have sound management practices,” Standiford said.

“This is not a significantly blighted property, but it’s not the most sparkling one in town either.”

City Councilman Bob Dinsen opposed issuing the bonds, saying property owners and not the government should take responsibility for land and facility maintenance.

“We have property owners who have property they let run down--they don’t maintain it, then ask the taxpayers to subsidize them to get the property usable,” Dinsen said.

“We need to find the teeth to make owners maintain their property so taxpayers don’t have to.”

Mayor Bruce Broadwater countered that issuing risk-free bonds gives the city a way to solve the problem of deteriorating properties without using taxpayer funds.