Council approves $2.1 million to keep downtown housing project eligible for tax credits

The Los Angeles City Council on an urgency vote approved $2.1 million in city funding on the condition the money be used to make a proposed 82-unit apartment project at 901 South Broadway competitive for state low-income housing tax credits.

Councilmember Pacheco said the allocation was necessary because a separate downtown funding source the project had expected was removed by state-level budget changes, and the developer needed gap financing to meet the tax-credit application deadline. "We want to bring these dollars to the city of Los Angeles," Pacheco said, urging colleagues to approve the reprogramming so the project could be submitted by the September 15 deadline.

The project team and Housing Department staff told the council the city contribution would be $2,100,000 in total: $1,300,000 from housing program funds set aside for affordable units and $800,000 from the mayor's economic development fund for the commercial portion. Staff said the $2.1 million represents about 16% of the project's stated $13 million total development cost.

Councilmember Ridley Thomas and other members pressed for additional analysis and raised procedural concerns about acting on short notice. Ridley Thomas said he was not disputing the need for housing downtown but asked for assurance that staff-level reviews (by the City Administrative Officer and Chief Legislative Analyst) and oversight steps had been completed before the council committed scarce federal block-grant dollars.

Housing staff and the project representative said the funding was assembled from prior allocations that had not been spent and that several independent underwriting reviews had already been completed to establish the project's viability. Staff also told the council the citywide pool of available block-grant funds was roughly $25 million and that the $2.1 million would be drawn from previously allocated but unspent balances.

After debate the motion passed by roll call. The council instructed staff to proceed so the developer could file the tax-credit application in time.

Votes and follow-up: The motion to allocate the $2.1 million passed on the council floor; the clerk recorded 10 ayes and the motion was adopted. Staff were directed to finalize the specific contract terms and to return with any standard administrative documents needed to implement the funding.

Clarifying details: the council and staff identified the application deadline as September 15 (state low-income housing tax credits); project cost was cited as approximately $13,000,000; city funding approved was $2,100,000 (split: $1,300,000 housing / $800,000 commercial); the citywide CDBG/block-grant pool referenced was approximately $25,000,000 (unspent prior allocations).