Council Balks on Deal to Renovate Apartment Units

What appeared to be a done deal to clean up one of the city’s worst slums now appears to be shaky.

The City Council on Tuesday refused to approve an agreement giving investors in the project $2 million in federal housing funds because city officials had not yet seen a revised agreement that, among other things, reduces city control of the project.

Barry Cottle of Tustin’s Southern Cal Investment Co., the spokesman for investors purchasing the Parklane Garden Apartments, said that the delay could kill the deal.

The council agreed to hold another meeting at 4:30 p.m. today in council chambers at Civic Center Plaza to take a final vote on funding for new investors.

Three of the five council members indicated that they would probably approve the grant, but they were far less enthusiastic about the project than they were two months ago, when Cottle first approached them.

At that March meeting, Cottle said the city’s $2-million contribution would be part of a $9-million project to rehabilitate all 256 units of the apartments on North Highland Street. The developer promised to rent 77 of the apartments to lower-income tenants in exchange for the city’s subsidy.

Since then, the investment group and the deal have changed.

Under the current plan, city funds would be used to renovate 80 units, which would be kept affordable for 55 years. But, unlike the original agreement, the city would have no control over what happens to the other 176 units.

Councilman Dan Slater said he had approved the previous agreement only because he thought the city had a guarantee that the entire complex would be cleaned up.

“Now all we’re getting for our $1.9 million is 80 units,” he said. “Unfortunately, they are in the northern end and sandwiched between a bunch of crud. . . . The city was in the driver’s seat, and we have abandoned that driver’s seat.”

But Mayor Joanne Coontz argued that the city cannot control the private sector and that the current deal at least ensures 80 affordable apartments for residents.

“This is true of all housing projects; you just get a little bit of them,” she said. “You have to start with just a few.”