The City Council unanimously refused to support a project Tuesday that would have renovated the vacant and long-troubled apartment complex at 291 Evandale Ave. to turn it into affordable housing.
While many council members appeared to support the idea behind the project, none had seen a design proposal to judge the quality of the improvements promised by developer KDF Communities. The council's support on Tuesday would have allowed KDF to apply for $12 million in state bonds for the project. Then council members would make a final decision later on whether to allow the project after KDF submitted designs.
"I'm kind of being asked to take things on trust," said council member Ronit Bryant. "We're opening a door for one specific developer who has given us nothing but words."
As it has done with more than 4,000 units throughout the state, KDF Communities would have taken the 64 apartments down to the wood frame, replacing everything from electrical to sheetrock and roofing. The firm says it has developed a positive reputation in San Jose, where it has renovated 2,000 units. Ray Harper, a principal with KDF, said it would cost $60,000 to renovate each unit, double what the firm usually pays. The cost illustrates the state of disrepair at 291 Evandale, described by many as a "slum."
City staffers supported the proposal by KDF Communities, a for-profit firm that specializes in renovating rundown apartment buildings to make them into affordable housing. The staff was concerned, however, about the building being a century old by the time a 55-year agreement to use the buildings expires.
"It was not an easy recommendation to make, let's be frank," said planning director Randy Tsuda, who said it weighed heavily on his decision that the apartments were "clearly blighted right now."
KDF had committed to giving 90 percent of the units to families that make about 60 percent of the area median income, or $63,660 a year for a family of four. Those monthly rents would have been $130 to $214 below market rate. The remaining units would go to those who make 50 percent of the area median income, or $53,050 a year for a family of four. Those monthly rents would have been $329 to $479 below market rate.
Harper said KDF is welcomed in most cities, where council members are grateful to have blighted apartments renovated and turned into affordable housing at no cost to the city. But Mountain View council members did not seem happy with KDF despite the firm's efforts to work with neighbors over the last few months, giving them tours of apartments KDF renovated in San Jose.
"I haven't been invited to go on a tour even though I expressed my full interest," Bryant said. "The developer has put no effort into convincing me. Again and again we get told this is your last chance," to move on a project. "I refuse" to believe that.
Originally, the complex's 16 buildings were to be demolished to make way for 144 condos, and last year the city spent $127,000 to relocate 33 low-income households there. Neighbors say crime has gone down dramatically since then, and that the gangsters who had taken over Devonshire Park have left the area.
Because of that, many neighbors want the complex demolished, and on Tuesday they gave the council a petition with 69 signatures opposing any re-use of 291 Evandale.
Council member Mike Kasperzak said fears that the KDF project meant a return to the problems of the past were "unfounded."
Eduardo Cerna, a broker for Marcus and Millichap, said he's been trying to sell the property since 2005. At one time the owner passed on many good offers from the state's top developers, but things changed after the housing market began to sink last year: Now even "second tier" buyers don't want to renovate the buildings, he said. One recently pulled out of a contract to buy the property after learning more about its problems.
A Los Altos-based developer who has been looking into buying the property told the council that it appears his project won't pencil out at the current price. Because of state bonds, KDF was able to enter a contract to buy the property with a higher offer than anyone else.
KDF's ongoing management of the affordable housing would have been overseen by the several state bond lending agencies who would visit the site periodically. A representative of one such agency, California Communities, told the council that the agency has never received any complaints about KDF projects over the years. Council members were not pleased that the city would have no control over how the property was managed, which the city usually does when it subsidizes affordable housing projects.
KDF would have had to spend $150,000 to $250,000 to come up with a formal design for the City Council to consider Tuesday night. While there may be a chance the council could approve the project with a detailed design plan, Harper didn't appear willing bet $250,000 on it.
"We believe we were proposing a high quality project," Harper said after the meeting. "We regret not being able to do a project in Mountain View."