to shift project to ‘in-lieu’ fees


A developer that built a new project in Marina del Rey that was required to include affordable housing under the Mello Act now claims it is not making enough money on the project and wants to pay “in-lieu” fees instead of providing the affordable units.

The County Regional Planning Department was scheduled to consider the request this week.

Goldrich & Kest — developer of the Capri Apartments at 13953 Panay Way in Marina del Rey — built the complex to include affordable housing under the state Mello Act.

But the developer now is asking to pay in-lieu fees instead of providing the affordable units because the return on investment for the project is somewhat less than the 6.99 percent that was predicted in a project that was supposed to cost $19,788,000.

In a letter dated June 13th to Jon Sanabria, Los Angeles County Regional Planning Department chief deputy, Goldrich & Kest vice president Sherman Gardner said:

“Since May 5th, we’ve learned that the project cost is significantly more than the $19,788,000 included in the projection and thus our return on investment is somewhat less than the 6.99 percent shown in the projection.

“We are most anxious to proceed with the in-lieu process.”

A prospective tenant of the new development says she has been waiting since June for her one-bedroom apartment, having signed a hold deposit agreement and paying $200 deposit and a $36 credit check fee, with a projected move-in date of last July 15th.

The rental office at Capri Apartments told The Argonaut that a meeting with the Los Angeles County Regional Planning Commission would be held in the county supervisors’ office in Los Angeles Wednesday, October 12th, regarding the “affordable housing situation at the apartments.”

The corporate office of Goldrich & Kest admitted that the Capri Apartments do not include affordable housing.

According to the County of Los Angeles Department of Beaches and Harbors “Affordable Housing Policy — County-Owned Marina del Rey” document, ten percent of all newly constructed units in the county-owned Marina del Rey, consisting of a mix of all unit sizes, be reserved for low income households.

The County of Los Angeles Beaches and Harbors Affordable Housing Policy document states that “many Marina projects, due in large part to very high land and construction costs in the Marina, coupled with the great disparity between market rate rents in the Marina and the maximum amount allowed to be charged as rent for affordable housing, it is possible that many Marina projects will prove to be infeasible to develop if affordable housing is required to be constructed on-site.”

At the same time, the Los Angeles County Beaches and Harbors Affordable Housing Policy document Exhibit 1 (Mello Act Affordable Housing Policy — Marina del Rey), states “that determining feasibility of on-site affordable housing for a project must be undertaken on a case-by-case basis.”

The document also states “the availability of in-lieu fees as a substitute for on-site construction is limited solely to projects in which it is demonstrated that on-site construction of the required affordable units is infeasible.”

The prospective tenant said she has called the rental office at Capri Apartments diligently, and has received the same answer, “The county is holding up the process of moving in.”

The prospective tenant also alleges that other individuals applying for an apartment were told by people in the rental office that the affordable housing was for seniors only, and that the tenants didn’t qualify.

The prospective tenant was told that only one-bedroom apartments on lower floors were available in that category, rather than a mix of apartment sizes as required under the Mello Act.

She said she has appealed to two county supervisors but has received no assistance from either Supervisor Yvonne Braithwaite Burke, in whose supervisorial district the tenant is currently living while waiting for her apartment, or Supervisor Don Knabe, whose district includes Marina del Rey.

The prospective tenant said she is angry not just for herself but for all low-income residents who may not have an opportunity to live in an area merely because they don’t have the money.

She alleged that developers are now throwing out the elderly who have lived in their buildings for years and have no place to go simply because money is to be made in new developments.