Community Corp Vies to Develop Civic Center Village

By Olin Ericksen
Staff Writer

June 16 -- For the first time in its nearly 22 year history, the City’s largest affordable housing developer could find itself in the awkward position of collecting market rate rents from some of its future tenants.

Community Corporation -- which owns and operates nearly 1,200 affordable units across Santa Monica -- joined 15 other developers last week in submitting qualifications to build three mixed-use, mixed-income apartment complexes at the new Civic Center site to be known as “The Village.”

At least 160 of the 325 units on the site -- which will sit on land currently occupied by the Rand Corporation’s headquarters -- will be reserved for low-income tenants. The development will include ground-floor retail, a public neighborhood green and mews and sidewalks linking to perimeter streets.

Although there is no guarantee that Community Corporation will make the shortlist of developers invited by the City to bid on the project, a scenario is not unlikely where the non-profit -- which built its reputation housing low-income tenants -- could become landlords to all tenants at the village, including those renting luxury apartments.

“This is really an unusual situation for us,” said Joan Ling, the director of Community Corporation. “We would prefer not to be involved in the market rate component, only the affordable housing, but if we need to be, we are capable of doing both.”

Ling acknowledges that the non-profit agency remains reluctant to manage anything other than affordable housing because of the unpredictable nature of renting in an open market.

“Investing in property where luxury apartments go for almost $3,000 can be a risky proposition if the market drops out,” she said.

In addition, Ling said, turnover in market rate units is higher than in subsidized housing.

“The culture is such in market rate housing that turnover is as high as between 70 and 80 percent,” Ling said. “So to integrate that into Community Corp’s mission statement, which emphasizes the feeling of community, could be difficult.”

It is up to the City to decide not only the mix of affordable versus market rate housing, but also if the project should be handled by one or several developers, Ling said. As a result, it is possible Community Corp could handle only the affordable housing component.

If Community Corp ends up as the sole developer, the total number of units rented at market rate will be “an insignificant” number, likely between 20 and 25 percent of the total 350 units, and would not become a precedent for future ventures, Ling predicted.

As the only local entity vying for the civic center prize, Community Corp may have a leg up on the competition. The non-profit has a close working relationship with the City and can bring “tens of millions of dollars” from outside sources, Ling said.

Still, it is too early to initiate talks with potential financial partners, Ling said.

Of the 16 developers and architects who responded to the City’s request for qualifications, about half are from the Los Angeles area.

They include KOR Realty Group, which owns the Viceroy and Four Points Sheraton hotels in Santa Monica.

Selected developers who responded to the request for qualifications will be asked to submit detailed proposals for the development.