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Saturday, Jun 3, 2023

Affordable Housing Bringing to Light Another Issue

Just before the Los Angeles City Council and Simms Development struck a deal to reduce a requirement to set aside 25 percent of the units in Simms’ proposed apartment project for workforce housing to just under 10 percent, the developer was getting ready to make an intriguing argument to the city. The gist was that another developer whose project was approved before the 25 percent affordable housing requirement went into effect, should not be allowed to get an extension on his project, which still has not broken ground. Instead, the entitlements for more than 800 units that developer was holding should be given to others who are ready to get building underway, namely Simms whose proposal for a 432-unit apartment complex at Variel and Eton avenues at the edge of Warner Center went to the city seven months before the 25 percent requirement was put into place. The play was never put into action because the council heard and approved Simms’ argument that the 25 percent requirement was not only unfair, it was also illegal and lowered the number of required affordable units to 42. But that does not mean the issue is going away anytime soon. For one thing, the council’s decision doesn’t lift the interim procedure, which means developers proposing new projects are still under the 25 percent rule, a requirement that significantly increases the cost of these developments and, according to many, does little, if anything, to solve the problem it was meant to address traffic. At the same time, the web woven when the interim procedures were put into place late in 2005 is becoming more and more tangled. In the same week that the council struck the deal with Simms, it also approved a request by Weintraub Financial Services to extend entitlements for its proposed 800-plus unit apartment complex on a property that currently houses Panavision’s U.S. headquarters on DeSoto Avenue. Weintraub sought and was given the entitlements several years back during a flurry of moves to convert some of Warner Center’s older industrial properties to accommodate the growing demand for residential housing. But there was a wrinkle in the plans: Panavision’s lease will not expire for several more years, so Weintraub went back before the council to get an extension for the entitlements. Those entitlements were granted to the developer before the interim control procedures went into effect, which means the Weintraub project, as approved, will devote just 4 percent of its units to affordable housing. More than a few developers who missed the boat before the 25 percent requirement went into effect when the number of entitled housing units reached 3,000, the limit set by the current Warner Center Specific Plan, effectively in the last two years and are now facing the 25 percent requirement, would love to get Weintraub’s deal. And with a citywide housing shortage and demand, they may have a good case arguing that Weintraub should not have been granted the extension. That was the argument Benjamin Reznik, partner at Jeffer Mangels Butler & Marmaro and the attorney representing Simms, was prepared to make if the council did not lower the affordable housing requirement for Simms’ development. And it’s an argument he and others say is likely to be come before the council again from other developers. The whole idea of setting aside 25 percent of new housing units as affordable is troubling enough. Ostensibly, it was a strategy to address a potential imbalance between homes and jobs that would occur if residential building continued. But, as Reznik argued before the city council on Simms’ behalf, it won’t have any effect on mitigating resulting traffic problems. Who’s to say that the renters in these new affordable units will work in Warner Center? They can work anywhere and, indeed, worsen the traffic congestion in and out of the area. Now there’s also the issue of whether another developer who is ready, willing and able to build housing immediately should not be given the unencumbered entitlements that Weintraub is sitting on. So just like most other planning issues in the city, this one will take the time of the council on a one-by-one basis without any overall policy to lead us out of the mayhem. Wouldn’t this time be better spent developing an affordable housing policy that business and residents of the city can live with? Calabasas Sale Calabasas Center, a 30,354-square-foot office complex on Agoura Road, was sold for somewhat more than $8 million. The two-story, two-building complex is fully leased Jay Rubin and Mike Tingus, brokers with Lee & Associates/LA North Ventura Inc., represented the buyer, a private investor. Jay Martinez, a broker with Marcus & Millichap, represented the seller, Kasco LP & Kasco Charitable. Glendale Tower Leases Newly renamed The Lexington, a Glendale office tower, has signed eight leases valued at a total of $12.5 million. The new tenants include Software Management Consultants Inc., who signed on for 9,800 square feet, Infinity Insurance Co., which inked a deal for 6,800 square feet, Zaks & Barnard, with a lease for 8,500 square feet, Insco Insurance Services, for 3,500 square feet, The Designory, with a 2,850-square-foot lease, and Fast Trading Services LLC, with a 1,700-square-foot lease. In addition, Employers Compensation Insurance renewed a 50,400-square-foot lease and Sequoia Concepts Inc. expanded its lease to 3,700 square feet. ING Clarion Partners, the owners of the building, a 419,760-square-foot property at 500 N. Brand Ave., was represented by Michael Weiner, a broker with DAUM Commercial Real Estate Services. Chatsworth Lease Currie Technologies Inc. has leased 48,000 square feet of office space at 9451 Owensmouth Ave. in Chatsworth. The 70-month lease is valued at $2.5 million. Senior reporter Shelly Garcia can be reached at (818) 316-3123 or by e-mail at sgarcia@sfvbj.com .

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