The Economic Development and Technology Committee unanimously approved on Tuesday the public benefit agreement with the California Statewide Communities Development Authority (CSCDA) for the acquisition of a 480-unit apartment property along De Lacey Avenue for conversion to affordable housing.
The property under the agreement, Westgate Apartments Phase 1, located at 231 De Lacey Avenue will become the fourth CSCDA project in Pasadena.
As a member of the CSCDA, the City has the ability to approve acquisition of housing units by the CSCDA, for conversion into affordable housing, by entering into public benefit agreements.
The City has previously entered into agreements for CDCDA’s acquisition of The Hudson apartments located at 678 E. Walnut Street, the Westgate Phases 2 and 3 apartments located at De Lacey Avenue, and the Theo apartments located at 289 N. El Molino Avenue.
Properties acquired by CSCDA are targeted for income-eligible households or those earning between 80 and 120 percent of area median income, or AMI.
Under the public benefit agreement for the Westgate Apartments Phase 1, the City is required to forgo property tax revenue for the approved project amounting to approximately $7,419,358 for the 30 year period from 2022 to 2051.
The agreement states the City has no initial ownership of the project. However, it maintains an option to force a sale or refinance the project in year 15.
The City is entitled to the excess proceeds after the debt is discharged after 30 years.
If approved by the City, staff said 96 low inclusionary units in the Westgate Apartments Phase 1 will remain affordable in perpetuity pursuant to the City deed restrictions.
The remaining 384 units are anticipated to be converted to affordable housing under the contract.
Of the 384 units that will be converted under the program, 173 units are planned to be designated for households earning 80 percent of AMI, 38 units will be designated for those earning 100 percent of AMI and 173 units will be designated for those earning 120 percent of AMI.
According to City staff, the project will generate rent savings amounting to $527,010,884 over the 30 year period.
If approved by the City, current tenants who are not income eligible may remain after the expiration of the leases but they will be subject to market increases in rent, according to City staff.