Council authorizes bond conduit for downtown loft conversion; critics raise concerns about CRA oversight

Los Angeles — The City Council approved using the city as a conduit issuer of bonds to finance the adaptive reuse of a historic downtown building into 209 loft units, with a 20% affordable set‑aside and credit enhancement provided by private letters of credit.

Don Spivak of the Redevelopment Agency described the item as authorization for bond issuance, noting the original authorization figure of $35 million was tied to a potential additional building and that the taxable portion now appears to be roughly $28 million. “The item before you is authorization for bond issues of up to $35,000,000. That number was set when the project potentially was going to include an additional building. It now appears that the bond portion will be about $28,000,000,” Spivak said. He said the project totals 209 units with 20% designated affordable (42 units) and a 278‑space parking garage.

Spivak and agency staff said no city general fund or CRA money is pledged; the bonds are housing revenue bonds repayable by the developer, backed by a letter of credit from East West Bank and a confirming letter from the Federal Home Loan Bank of San Francisco. A staff representative said the structure yields an investment‑grade credit enhancement.

Public comment included supporters praising downtown adaptive reuse and one critic, John Walsh, who urged a pause on major CRA moves while the agency faced investigative reporting and internal probes and alleged misconduct. Council members responded that the bond authorization is a conduit action required by law for developer financing and that the city and CRA are not guaranteeing repayment; the project was approved on a 13‑vote recorded tally.

Next steps: Agency to proceed with bond closing, developer to satisfy the letter‑of‑credit and credit enhancement conditions before issuance.