Los Angeles — In a neighborhood that has seen little new construction during the last 20 years, one affordable housing developer has boldly taken on four key projects at once.
Two of them – the 121-unit affordable family development Tesoro Del Valle and the adjacent 102-unit affordable seniors housing complex Camino Al Oro – opened their doors in the first quarter of this year.
Next to these apartments, a 165-unit mixed-income condominium project called Puerta del Sol is under construction. And, across the street, a 146-unit affordable family project named Flores Del Valle is being built. This property will feature a day-care facility for 50 children. These last two projects are expected to open in late 2006.
AMCAL Multi-Housing, Inc., is developing all four projects, which will add more than 500 new housing units and mark a significant investment in Lincoln Heights, a neighborhood that’s not used to the sounds and smells of new construction. Bordered by 26th Avenue, the developments stand as separate and unique projects, but they work together with complimentary colors and design.
“What you have there is a changing landscape,” said Los Angeles City Councilman Ed Reyes, who represents the neighborhood and supported the project. The area is one of the original suburbs to downtown L.A. Over the years, it’s been home to several different immigrant groups, including the many Latino and Asian families that live in Lincoln Heights today.
Industrial sites have long been a part of the neighborhood landscape, and those properties are beginning to be redeveloped as well, Reyes said. The new capital coming into the area is changing the neighborhood, and it will be important to make sure that housing stays accessible to the people who live in the community, he said.
Reyes pointed out that the Avenue 26 developments address a range of needs.
The new projects also signal the first significant housing development along the city’s portion of the Pasadena Gold Line, a metro line that runs between downtown Los Angeles and Pasadena.
“The project is an opportunity to revitalize the entire community,” said Percival Vaz, AMCAL president.
Being next to the new transit line is one of the unique features of the projects, he said. The metro station had yet to open when AMCAL began its pioneering project.
AMCAL became involved when Vaz and his team were shown the site by a broker more than two years ago. A closed furniture factory stood on the roughly seven-acre property. The building was boarded up and covered with graffiti.
Receiving strong community and political support to redevelop the property, AMCAL decided to take on the project. The company, one of the largest low-income housing tax credit (LIHTC) developers in the state, received 9% tax credit reservations for all three of the affordable developments.
The developments put the longtime company in line for its biggest year, with about 1,000 units coming online in 2006, according to Vaz, who estimated that a similar number will begin construction.
Financing for Tesoro Del Valle, which features a four-story craftsman-style design, included more than $11 million in tax credit equity from Sun America Affordable Housing Partners. California Bank & Trust provided a $6 million construction loan, and the California Community Reinvestment Corp. (CCRC) provided a $5.9 million permanent loan. The project has 48 two-bedroom units, 65 three-bedroom units and eight four-bedroom apartments. Targeted at families earning between 30% and 60% of the area median income, the apartments rent from about $500 to $1,100 per month.
Financing for the neighboring three-story Camino Al Oro senior apartments included about $6.5 million in tax credit equity from Sun America, a $3.6 million construction loan from Wells Fargo Bank, and a $3.6 million permanent loan from CCRC. These apartments also target people with incomes between 30% and 60% of AMI, and rents are from about $400 to $875 per month.
AMCAL could have made the entire project rental apartments, but decided to include workforce condominiums to add diversity in the neighborhood, according to Vaz. Equity financing for Puerta del Sol is being provided by the Genesis L.A. Economic Development Corp.’s Genesis Workforce Housing Fund. The fund is managed by the Phoenix Realty Group, which has called the condos the nation’s first for-sale workforce housing project financed by institutional capital. Prices for the condos are still being determined, but officials anticipate that they will start in the $300,000s. The Los Angeles Housing Department will provide downpayment and other assistance for qualified buyers who earn up to 150% of the AMI. About 2,000 names have been taken for the 165 units.
Individually, each development is similar to the projects that AMCAL has built in the past. Together, however, they provide “a bigger palette to work with,” said Sean Hyatt, vice president of development.
Some of the extra touches included double-wide sidewalks and old-fashioned streetlamps. Tesoro Del Valle has a craftsman-style design, and Puerta del Sol will have Art Deco touches to play off some of the shapes and designs found in the neighborhood.
The affordable projects were designed by Van Tilburg, Banvard & Soderbergh. The architect for Puerta del Sol was Meeks + Partners.
Like many builders, AMCAL was caught by the sharp spike in material and labor costs. The firm has a large database of historic information to help officials gauge costs, but that did not help much in 2005 because prices went beyond expectations.
Some of the steps that AMCAL has been taking to cope with rising costs include locking up prices as early as possible. Also, instead of budgeting based on conceptual plans, the firm is taking plans to a project-ready level and then bidding them out, which requires more capital upfront, Vaz said.