Judge Blocks Housing Deal Between Caltrans and Local Church

A Los Angeles County Superior Court judge has issued a preliminary injunction preventing Caltrans from selling a South Pasadena property to a Pasadena church.

Friendship Baptist Church and the city of South Pasadena want to buy a 12-unit South Pasadena property and redevelop it as affordable housing under the Roberti Act, which mandates the procedure for the sale of hundreds of properties acquired by Caltrans for long-scuttled plans to build an extension of the Long Beach (710) Freeway in order to connect with the Foothill (210) Freeway.

“The California Department of Transportation is enjoined from selling the property located at 626 Prospect Avenue, South Pasadena, California 91030 to the Pasadena Friendship Community Development Corporation,” Judge Mary Strobel ruled.

According to Strobel, the church’s proposal denies tenants the chance to purchase their units.

“Unlike petitioner’s proposal, Pasadena Friendship’s proposal would not make the units at the property available for sale to the current tenants. Rather, Pasadena Friendship proposes to establish a ‘permanent inventory of affordable rental units and tenant centric communities,’” the judge wrote.

Caltrans seized the properties in Pasadena, South Pasadena and El Sereno under eminent domain more than 60 years ago. Under the Roberti Act, public housing-related entities (HREs) have priority over private HREs.

South Pasadena planned to have its housing authority, a designated public HRE, purchase the property and transfer it to New Prospect Development — a limited liability corporation (LLC) whose members are a private group of 626 Prospect tenants and a private nonprofit, Heritage Housing Partners.

“The Roberti Law and Roberti Regulations provide preferences in selling multi-unit buildings in the 710 corridor to the tenants in the building and to the local city where the property is located,” wrote local attorney Chris Sutton, who represents Caltrans tenants in other cases.

“South Pasadena assigned its priority to an entity controlled by the tenants at 626 Prospect jointly with Charles Loveman and Heritage Housing. Thus, they had a double priority under the law. Instead, Caltrans rejected the city and tenants’ statutory priorities and entered into a sales contract with Pasadena Friendship Community Development, an entity associated with Friendship Baptist Church at Dayton and Delacey in Pasadena in Old Town, a 100-plus year old African American church,” Sutton wrote.

Caltrans said it denied the South Pasadena application because the city did not constitute a “public housing related entity.” The application included an arrangement that would have allowed the property to be swiftly transferred to a private group of residents living in the buildings. The residents started New Prospects Development (NPD) after unsuccessfully attempting to purchase the building. NPD is not an HRE.

In June, Caltrans sought permission from the California Transportation Commission to quickly close escrow and immediately sell the property to Pasadena Friendship Community Development.

Caltrans attorneys claim Friendship Baptist would build more affordable housing and claimed that pending legislation would amend the Roberti Act making it easier for South Pasadena to secure and regulate surplus Caltrans property.

Under the Friendship Baptist proposal, a private, nonprofit HRE would have purchased the property.

Trial is expected to begin in May.

Caltrans claims that time could be an issue because the church’s lender is not expected to commit to loan approval indefinitely and a delay would force the church to have to start the entire process over again.