A Savvy Housing Group Expands

An East Los Angeles nonprofit organization known as a prolific low-income housing developer with political ties to high-ranking Latino lawmakers has launched an aggressive expansion into the fast-growing Inland Empire.

The East Los Angeles Community Union, an economic development corporation that includes profit-making subsidiaries, already has opened three senior housing projects in San Bernardino and Riverside counties and is planning to build four more in the near future.

The organization, known as TELACU, is replicating a strategy that made it an influential political player in Los Angeles County: Its officials are building close ties to Latino politicians in the two inland counties in part by distributing generous campaign contributions.

“We are engaging in the political process,” said President David Lizarraga. “That’s the American way.”

The organization is more than a charitable builder. The nonprofit oversees a for-profit family of companies, known as TELACU Industries. The companies include a community bank, a restaurant and a roofing supply company. In all, the group has gross revenue of nearly $100 million a year and $350 million in assets.

Its officials donated more than $200,000 to political campaigns in 2001 and 2002, primarily to Los Angeles County lawmakers such as then-Assemblyman Marco Antonio Firebaugh (D-Los Angeles) and statewide officials such as Democratic Lt. Gov. Cruz Bustamante.

Two of the most powerful politicians in the region, Los Angeles County Supervisor Gloria Molina and former state Sen. Richard Polanco, were former employees of the organization. Esteban Torres, one of its founders, went on to take a job in President Carter’s administration and later won a congressional seat.

Over the last two years, Lizarraga and other leaders of the group also have given sizable political donations to several Inland Empire candidates.

During the last election, officials in the organization gave $9,600 to Joe Baca Jr. (D-Rialto), who won a state Assembly seat in November, and $7,000 to Josie Gonzales, who was elected to the San Bernardino County Board of Supervisors. The group also donated $800 to San Bernardino Mayor Judith Valles, who faces reelection in November.

Valles said she has been impressed by the group’s work in the region and has no objections to its efforts to build ties with local Latino officials.

“Ultimately, it’s OK if it benefits the community,” she said.

Gonzales, a former Fontana City Council member, called the group’s efforts to bond with Latino lawmakers a winning strategy. “They want to succeed, and that is what businesses do to succeed,” she said.

The projects built in the Inland Empire by Lizarraga’s group have been financed largely through grants from the U.S. Department of Housing and Urban Development. But local cities also have contributed.

The group’s first development in the Inland Empire was a $3.5-million, 57-unit senior housing project that opened in Moreno Valley in 1992. The city contributed more than $950,000 in local and federal funds to pay for improvements.

In the last two years, the group has completed two other senior housing projects in San Bernardino, each with 75 units. The project on H Street cost $8.6 million; the project on 6th Street cost $6.7 million. A third project is under construction in the southern end of the city. The city of San Bernardino contributed about $1 million for off-site improvements, such as landscaping and sidewalk work, to all three projects, according to city officials.

In Riverside, the group is building a $9-million, 70-unit senior housing project on 11th Street. Riverside city officials combined several parcels to form a 2.2-acre property, which the group bought for the building, according to city officials. The city also gave the group a $650,000 grant to cover landscaping improvements and building upgrades.

The organization also plans to build an $8.4-million housing project in Rialto next year.

The group is based in East Los Angeles, but Lizarraga said his organization was prepared to build housing wherever needed.

“Our world doesn’t revolve around 4 square miles called East Los Angeles,” he said.

Local housing officials have praised the organization, saying it has won local funding partly because of its reputation for securing highly competitive federal grants.

“They know the ins and outs of getting the financing,” said Shirley Wolf, housing and community development manager for Riverside.

San Bernardino Councilwoman Wendy McCammack said she had been impressed by TELACU’s ability to operate low-income housing projects in blighted communities.

“TELACU has had a reputation of building a good product and maintaining its senior housing status for a long time,” she said.

So far, there has been little grousing from local nonprofit developers about the group’s move into the Inland Empire. Some developers and housing officials say they welcome the organization to the area because the need for low-income senior housing in the region is great.

In the next 25 years, the number of households with residents 65 and older in Riverside and San Bernardino counties is expected to increase from 117,000 to nearly 170,000, according to the Southern California Assn. of Governments.

“We are all working to meet the need,” said Gloria Chavez, a spokeswoman for the Southern California Housing Development Corp., a nonprofit housing builder based in Rancho Cucamonga. “We don’t see it as anyone coming into our backyard.”

The East Los Angeles Community Union was launched in 1968, amid social unrest in heavily Latino East L.A., and has built nearly 2,000 low-income apartments for seniors throughout Southern California.

In 1982, the organization was investigated by federal auditors after a tip by a former employee about spending irregularities. After 2 1/2 years of scrutiny, the group was forced to refund $1 million for mishandling a rural assistance program aimed at helping poor people. One group official also was placed on five years’ probation after he admitted he enrolled in a federal jobs program and got paid thousands of dollars for work he never did.

A history professor at Southern Methodist University in Dallas wrote a book in 1999 on the group’s history, describing its role as political kingmaker in East Los Angeles.

The organization’s history and reputation mean little to the senior residents at Sierra Vista, the project on 6th Street in San Bernardino, who offered almost unanimous praise for the facility.

To qualify for an apartment, residents must be at least 62 and earn no more than $19,000 per year ($21,700 for a couple). The rent is 30% of household income.

Sierra Vista has a gurgling fountain, a rose garden, a third-floor sundeck, a common room with a big-screen television and a vegetable garden. The apartments are modest but clean and include emergency pull cords so seniors can summon staff in case of medical emergency.

Ernestine Young, 67, a former barmaid, moved in soon after it opened last year. She said she gets along with the other seniors and likes having a laundry room in the building so she doesn’t have to lug dirty clothes to a self-serve laundry late at night.

But she said her favorite amenity was the third-floor patio, where she spent hours each day basking in the sun and watching airplanes fly by.

“I love it here,” she said as she gave a visitor a tour of the building. “I don’t want to ever move.”