M. Terry / El Sol

Resident Donna Prince gives her views on the Penny’s Apartments project to the San Fernando City Council during the Oct. 20 public hearing.

The controversial project to build low-income apartments inside the San Fernando Mall took another step toward construction after the city council passed a resolution enabling developers to seek partial funding through the issuance of bonds from the California Statewide Communities Development Authority (CSCDA).

The council vote — 3-2 in favor during its meeting on Monday, Oct. 20 — enables Aszkenazy Development, Inc. to pursue multifamily housing revenue bonds from CSCDA not to exceed $12 million. The project’s total cost is estimated at $20 million.

Council members Jesse Avila, Antonio Lopez and Robert Gonzales voted in favor of the resolution. Mayor Sylvia Ballin and Councilmember Joel Fajardo were opposed.

The vote concluded a loud and occasionally rancorous public hearing, which first began at the Sept. 15 council meeting and concluded on Monday with a CSCDA representative’s presentation about the bonds. It was also the last chance for residents to comment on the project.

An overflow crowd filled the council chambers, some carrying signs and waving placards saying “No” to the building project and the bond issue.

Aszkenazy Development (which owns and publishes the San Fernando Valley Sun/El Sol) has proposed constructing a four-story project — now known as Penny’s Apartments —  where the now closed JCPenney department store is. Three stories would house 101 units of one-bedroom apartments, designated as low-income or affordable housing. Only two people will be allowed per unit. The first floor would be for retail business. In addition, 108 parking spots — most of them underground — are planned.

According to City Manager Brian Saeki, 90 percent of the residential units are for qualifiers making 60 percent of the Los Angeles County Area Median income level, meaning a one-person household cannot make more that $34,260, ands a two-person household cannot make mor than $39,120. 

Opponents argue the project would create parking and foot traffic congestion, increase public safety concerns, and said there has not been enough pursuit of new retail businesses to replace the JCPenney store.

“I know all of you [on the council] and I respect you. But I think this is a serious error in judgement and planning,” said Irene Tovar. “You cannot bring that many people into a city of two square miles without increasing costs to the city. That’s a very basic 101 lesson.”

Supporters say the project would help attract a younger demographic that would encourage more businesses here and revitalize the downtown mall.

“I live in the city and have a business in downtown San Fernando,” Vanessa Ceballos said. “I’m all for this project, I think it’s a great idea. I think anybody who can get into the mall, beautiful. For young people like myself…there really isn’t much to do here. If we can get people into the city with income, we’ll be able to attract bigger stores.”

Caitlin Lanctot, the CSCDA representative, told the council and residents in the chambers that if the project meets state and lender criteria, the agency would issue bonds at no cost to the City of San Fernando. She added the city would not be liable if the bonds went into default.

“There is absolutely no financial responsibility by the city,” Lanctot said. “The bonds will be repaid by the project revenues. And ultimately, if anything were to happen, it is the project developer who is responsible for repaying those proceeds.”

She said the bond funds would come from Citibank, the proposed lender, “and it is a loan, so Aszkenazy [Development] will be repaying that.”   

But the idea of having low-income housing in the downtown mall being a bad one was a constant concern on Monday, along with suspicion of the bond sale.

“I’m here to ask you not to approve the issuance of the multifamily revenue bonds,” said Mary Mendoza, representing a grass-roots organization called Residents For A Better San Fernando. “Today you could be making a decision that could change the dynamics of our city forever. Given that, I want to remind you of your political responsibility.

“Everyone who votes will be held accountable for the decision made on the issuance of the bonds…just because you can do something doesn’t mean you should, especially when your community is speaking loudly for certain changes not to happen,” Mendoza said.

“I don’t know if you guys remember how, a couple of years ago, how bad San Fernando looked if we’re going down this road,” said resident Eric Tovar. “And now you want to bring in more ‘affordable housing?’ ‘Affordable’ is a nice word for ‘low-income,’ and ‘low-income’ is a nice word for ‘poor.’”

Another resident, Tony Ruiz, said, “I lived here all my life and seen the ups and downs our city’s been through. Our residents lost trust with the [last council] and we don’t want to lose trust in you. We’ve given you the trust to take care of our city and it doesn’t seem that way.

“There’s been no transparency from the get-go. The residents were misled on how the project was going to be. We don’t want apartments in our mall. We want retail stores, make the mall into what it used to be. You start putting residents in our mall and it will destroy our mall.”

Eric Mayte was among the public supporters  of the project. Noting the monthly rent was estimated at $900 per month, he said, “Whose making that kind of money? Fresh college grads. A single mom. Maybe somebody who works at a restaurant. But young people who have ambition, a vision. I want those people in my city.”

Resident Donna Prince described herself as “a person of of low-income.”

“I feel grateful I can be a resident of San Fernando because of [existing] affordable housing,” she said. “My only alternative would be homelessness, myself and my disabled son. I don’t have a lot of money to spend after I pay the rent, but I do have enough money to patronize local businesses here. I make it a point to do that because I want to put back into this community.

“I hope you guys have the courage to do the right thing and vote ‘yes’ on this bond.”

With the final council vote, Aszkenazy Development can now submit an application to the CSCDA’s tax credit allocation committee for the bonds. Lanctot said the next available period is in January. “It then takes 90-100 days to close,” she said. “There is a lot more to be done; the state still has to review [the project]. The lender has to approve; there are other parties that have to approve. Tonight was another step.”

Following the vote, Mendoza expressed her disappointment at the council’s decision.

“I’m very sad. I was born and raised in the community…I guess they didn’t listen to the residents, the community. I beg to differ with the comments that were made, and how true they were. This is a sad day for the residents. This changes the dynamics of our city.

“We will regroup and see what our next step will be.”