LEMON GROVE
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An affordable-housing developer receiving $825,000 in loans from the city of Lemon Grove for a 36-unit project is seeking another $300,000 to help finish construction.
The city's community development agency paid about $1.9 million for the land to build the project on Broadway near West Street, and is lending money to developer Community Collective for construction and other costs. The company has received $355,000, and is supposed to receive the balance over the next few years.
Under an agreement, the agency will lease the land for 55 years, and then it will own the project.
But the project's price tag jumped by $100,000 after crews discovered – and then had to remove – abandoned underground utility lines near the project area. Another snag came when officials learned it would take months longer than anticipated to secure loans from the U.S. Department of Housing and Urban Development. That timeline could jeopardize the company's eligibility for another $7.7 million in state funding for the project.
Considering the request at a Lemon Grove City Council meeting this week, Mayor Mary Sessom questioned whether Community Collective could have learned sooner of the timetables involved in applying for the federal loans.
City Manager Graham Mitchell said city staff had also considered that question, but still recommended helping the company.
According to a staff report, the company has already cut about $200,000 from the total project costs. It is seeking additional funding from other sources that could lessen the amount of the $300,000 loan.
The community development agency has enough funds to cover the shortfall, Mitchell said, and would not distribute them to the company until after the project is completed.
Council members asked if the developer could scale back some of the project's technological amenities to cut costs further. Each unit would have high-speed Internet connections, among other features.
A representative from Community Collective told the council that the amenities would give low-income families expected to move into the development a “leg up in society.”
The council took no action, and plans to discuss the issue at a later meeting.
Community Collective broke ground on the development this year. The council approved the project last year over objections from some neighbors that its density was too high. When completed, the project is expected to fulfill nearly half of the state's requirement for low-and very low-income housing in the city.
Mitchell said the shortfalls haven't held up construction on the project, which is expected to be completed next year.
Michele Clock: (619) 593-4964; michele.clock@uniontrib.com
