City Turns Down $1.5 Million; It’s ‘Right Thing to Do,’ Mayor Says

In a surprise move, city leaders in this modest farming community have rejected an offer by wealthy Indian Wells to spend $1.5 million for low-income housing here.

Indian Wells is obligated by state law to spend the money on such housing, and sought to fulfill the commitment by spending the money away from the gated desert town where Lee Iacocca, Bill Gates and John Elway own homes.

Coachella officials expressed interest this fall in accepting the offer, but that was before a single vote in the recent municipal election shifted the balance of power.

On Wednesday night, a divided Coachella City Council voted 3 to 2 to refuse the money. The council majority contended that Indian Wells city leaders were trying to skirt state law--and their own social responsibility--in not trying to provide affordable housing within the town’s 14 square miles.

“We turned away more than a million dollars last night because it was the right thing to do,” Sylvia Montenegro, Coachella’s new mayor, said Thursday.

“Indian Wells has a responsibility to provide housing for their workers in their city. I think they can do good things. I hope they build family housing.”

Housing advocates previously have blasted Indian Wells as the “poster child for redevelopment abuse in California,” but city officials say they were simply trying to spend the money where it would do the most good.

Indian Wells City Atty. John Cook said Thursday that the money will now be used to build more senior citizen housing in the city, which is east of Palm Springs. Aside from maids quarters, senior complexes are the only low-income housing in Indian Wells, where the median income is an estimated $110,000 a year.

“We’re disappointed to not be able to help the homeowners in Coachella,” Cook said. “But now we’ll just proceed with additional senior housing here.”

Indian Wells officials have been forced to spend money on low-income housing after using state redevelopment laws--intended to help cities reverse blight--to turn empty desert into a 36-hole championship golf course flanked by opulent resorts. In 1983, city officials had declared the desert area “blighted” to generate development funds--a move that has since prompted state lawmakers to tighten redevelopment regulations.

So far, the city has fulfilled most of its obligations by spending $13.6 million on a gated, 90-unit senior apartment complex, and by committing an additional $14.6 million for a 100-unit seniors complex.

City officials planned to give another $1.5 million to Coachella, a nearby community that has a median household income of $29,000. The money was to provide low- and no-interest loans for the rehabilitation of existing housing. Officials said it might have benefited as many as 150 families.

Coachella Councilman Gilbert Ramirez, who voted to accept the offer, said Wednesday’s vote hit him “in the gut with a disheartening thud.”

“I grew up in Coachella in a house with holes in the walls and screens for windows,” Ramirez said. “Here, we had an opportunity to help people who don’t have enough equity to go to the bank and get a loan.

“How do you tell people we had an opportunity to help and an irresponsible council voted it down? They put social issues before their own people.”

The fate of $1.5 million was essentially decided by one vote in Coachella’s November election.

Before then, the council majority was eager to accept the money. But then saleswoman Rosanna Contreras beat incumbent Richard Macknicki by a single vote in a contentious election where 826 people cast ballots. Contreras cast the deciding vote Wednesday night against accepting the Indian Wells offer.

“One vote really can make a world of difference,” said Montenegro, who was herself first elected to the council in 1973 by the margin of a single vote.