‘Transit Village’ Development Trend Gains Ground in Valley

The growing national trend of linking commercial and residential projects to transportation hubs will get a boost today when a San Fernando Valley developer and his partners put several new homes in their Sylmar “transit village” on the market.

Tarzana-based developer Montage Development Inc. and American CityVista, the affordable-housing company run by former Housing and Urban Development Secretary Henry Cisneros, will make available 13 homes at Montage at Village Green, a development 50 yards from the Sylmar-San Fernando Metrolink station.

The project, when completed next summer, will feature 109 single-family homes starting at $214,000. Five-bedroom units with 2,000 square feet go for about $229,000, making them among the most affordable larger homes in the San Fernando Valley, said Steve Ross, president of Montage Development.

“People are catching on to the fact that they can eliminate the stress of commuting by car by buying a home near a train station,” Ross said. “Residents in Sylmar can walk to the Metro station across the street and get to Union Station in about 10 minutes.”

Montage at Village Green already sold 10 homes in the first phase of construction. Potential buyers who have pre-qualified for a home loan will be tapped from a waiting list to buy from among the 13 new homes.

As interest in transit-oriented developments has grown, so has the participation of big investors. Fannie Mae, the nation’s largest provider of mortgage money, invested $1.5 million in the $20-million Montage at Village Green.

The mortgage investors also designed a special loan for the project, called the Los Angeles Transit Mortgage, which provides flexible credit guidelines and low down payments to buyers, many of whom would not qualify for a loan otherwise.

Metrolink, the long-distance commuter rail owned and operated by the Southern California Regional Rail Authority, also jumped on board, offering the development’s home buyers two free one-month Metrolink passes.

The Sylmar project marks the first time the commuter service has partnered with developers in the creation of transit villages, but a Metrolink spokesman said the rail authority hopes to pursue other partnerships in the future.

“People today are beginning to change their thinking about public transportation,” said Los Angeles City Councilman Hal Bernson, Metrolink’s chairman of the board. “In Sylmar, we have a lot of lower-income people who can’t afford cars. It’s very important that we provide low-cost and affordable housing where we can, especially near transportation corridors.”

Transit-oriented developments, already popular in San Francisco, Seattle and other cities, are gaining ground in Southern California, where the Metropolitan Transportation Authority has established partnerships with developers on more than a dozen projects.

The MTA owns or controls land near most of the Red Line and Blue Line stations and plans to team with developers at every subway station where the transit authority has enough land to build, said Carol Inge, the MTA’s deputy executive officer.

Last week, the MTA agreed to enter into an exclusive, six-month negotiation with Wilshire Entertainment Center, a developer interested in building a four-story retail and residential complex at the Wilshire Boulevard-Western Avenue Metro Red Line station. The development would include 50,800 square feet for retail stores, 182 rental units and 564 parking spaces.

This fall, a $615-million entertainment and retail complex, including the Academy of Motion Picture Arts and Sciences’ new home, will open above the Hollywood Boulevard-Highland Avenue Metro Red Line station. The MTA will earn about $500,000 annually from the ground-lease agreement.

The MTA also has provided land or financial assistance to projects such as a 60-unit affordable-housing development at the Hollywood Boulevard-Western Avenue Metro station, and a tentative ground-lease agreement has been reached with the developers to build 60 additional units, a day-care center and 10,000 square feet of retail space.

“The goal is to redevelop neighborhoods and build up commercial values,” Cisneros said. “There’s a quality-of-life dimension to these projects too.”