Hope builds in South L.A.
A decade and a half after deadly riots scarred South Los Angeles, an ambitious $100-million housing and retail complex spanning several blocks is set to get underway this winter.
The project is church-inspired and partly church-financed. Plans call for 150 condos, 100 apartments for seniors, offices for small businesses, child day care and stores to serve the neighborhood. Construction job training will be provided for unskilled workers.
The planned development is in the blocks around 85th and Hoover streets, where existing apartment buildings tend to be locked up like fortresses, protected with metal fences to discourage intruders.
“It’s a rough area,” said developer Scott Chaplan of Santa Monica, who is teaming with Bishop Noel Jones, pastor of City of Refuge Ministries church, and other supporters. “We have had drive-by shootings in the past.”
City Councilman Bernard Parks says he supports the project in part because it will include units that aren’t subsidized for the poor.
“Most of the new market-rate housing for purchase or rent has moved out of this area,” Parks said. “We’re not getting the variety of housing that’s needed.”
Condos at Bethany Square are expected to cost $340,000 to $380,000, the developers said.
Land has been assembled in the predominantly black and Latino neighborhood, plans are drawn, permits are being sought, early cash has been raised, and construction is set to begin in January -- all at the newest environmental standards.
The development also would chip away at a severe shortage of housing for lower-income residents in Los Angeles, whom private developers have mostly ignored.
“More and more families than ever, especially the working poor, are finding it difficult to afford houses in L.A.,” said Robert Dhondrup, a spokesman for the Southern California Assn. of Non-Profit Housing. A couple with minimum-wage jobs would each have to work 80 hours a week to reasonably afford a median-priced two-bedroom apartment at $1,426 a month.
The real estate boom of the last five years has actually reduced the number of low-cost apartments in Los Angeles County as developers converted them to condominiums or razed them to make way for other more profitable uses, Dhondrup said.
Though industry experts note that the project still faces many hurdles, Bethany Square represents for many nearby residents a new burst of jobs and capital infusion to the inner city. Others are simply delighted with talk of day care, a bank, small shops, a restaurant and a market. They are in short supply here.
“Since the unrest and burning, we haven’t seen a lot of businesses coming in,” said Inez Broussard, who has lived in the neighborhood since 1958. “We don’t even have a sit-down restaurant in the area.”
The project has been in the works for years. At its heart is City of Refuge Ministries, which moved its growing congregation to Gardena in 2004. But it left with the desire to create something of lasting value on its Hoover Street property.
It was Jones the church pastor (and brother of singer Grace Jones) who orchestrated the move to Gardena, oversaw the financing and construction of the large church there and forged the plan for Bethany Square. It was also he who enlisted developer Chaplan.
“I didn’t want to leave the neighborhood without leaving a footprint,” Jones said.
Owning the land gives the builders an advantage because high land costs can make developments economically unfeasible, said Con Howe, former planning director of Los Angeles. “That makes it possible to have a marketable housing project.”
The land costs -- one of the biggest parts of any project -- are taken care of. Permits are set and financing is complete on the first phase of the project, offices and a bank, set to start this winter.
Jones and Chaplan are taking advantage of various tax breaks and grants. Some other parts of the financing are complete, and the developers hope to sew up the remaining resources they need in the year ahead.
“The city hasn’t been asked for money, which is rare in a project like this,” said Gil Duran, a spokesman for Mayor Antonio Villaraigosa.
“As far as we can tell, it’s a dream project that could really prove to be a main catalyst for the economic resurgence for South Los Angeles.”
Construction permits are still needed from the city and the Los Angeles Community Redevelopment Agency. The developers have funds to get started, but millions of dollars more in financing will be needed to complete the project by 2010 as planned.
Willingness to move ahead without having every aspect of a development nailed down is characteristic of church-related projects, said Philip Hart, executive director of the Urban Land Institute in Los Angeles, a nonprofit real estate think tank. “They step out on faith.”
The City of Refuge church’s desire to use its former site and other nearby land for a community-minded project is part of a long tradition, said Douglas Nelson, the mayor’s former faith-based-initiative liaison.
“There is a tremendous history of community and economic development within the African American church experience,” Nelson said. Churches built housing and developed social programs “because the government could not or would not do it. These are the blossoms from those seeds that were planted hundreds of years ago.”
Bethany Square is one of a few substantial church-related or “faith-based” developments being planned in Los Angeles. The West Angeles Church of God in Christ has completed a new sanctuary and is planning a large retail and residential development on its property along Crenshaw Boulevard.
Jones came to know Chaplan, who is white and also a lawyer, after Chaplan successfully defended the church in a negligence lawsuit stemming from a vehicle accident that could have bankrupted the church.
“He had a great sensitivity for people not of his race,” Jones said.
Chaplan helped arrange crucial financing to get Bethany Square off the ground -- federally sponsored New Markets Tax Credits, which forgive income taxes for investors who invest in approved projects.
Investment bank Morgan Stanley has purchased $5 million worth of credits, and Chaplan expects it to buy $6 million more. Another loan for almost $2 million was signed last week.
Norris Lozano, president of Portland Family of Funds, a company that specializes in tax credit financing, said the tax credits were intended for just such a project. “The program is meant to deliver capital to geographical areas that are less likely to get it other ways,” he said.
The developers also hope to get a combination of bonds and tax credits for the low-income senior portion of the property. The rest of the financing should be provided by traditional lenders, along with down payments and other equity by Chaplan’s company Urban Holdings and City of Refuge Ministries.
The builders have spent more than $1 million on the early phases, including designs by Pugh+Scarpa Architecture, engineering studies and soil safety assessments. Chaplan estimates they will spend an additional $1.5 million on permit fees, construction drawings and other costs before breaking ground.
“Our objective is to move people up from renting to owning to prove to the country it works,” he said.
“We don’t want people sitting around with their hand out waiting for the government to change their lives.”
The job training program and the development itself are in keeping with the tenets of his Pentecostal church, Jones said. “We want to join those who have had good opportunities with those who haven’t and empower them so all of us can make L.A. a better city.”
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‘Faith-based’ development
City of Refuge Ministries and its supporters expect to start work in January on the first phase of a $100-million residential and commercial development near the flashpoint of the 1992 riots in Los Angeles. It would be completed in 2011.
1. Condominiums and commercial uses such as shops
2. Apartments for low-income seniors and offices for small businesses
3. Child care, condominiums and shops
4. Condominiums over street-level stores
5. Offices, restaurants and a bank. The first phase is expected to start in January.
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Source: Pugh+Scarpa Architecture. Graphics reporting by Jerry Hirsch
