Redlands council approves Venue at Orange Phase 2 and $1.5 million interfund loan to add 50 very-low-income units

Redlands City Council voted to approve Phase 2 of the Venue at Orange project and to authorize a $1,500,000 interfund loan from the general fund to the city’s Inclusionary Housing Fund to support 50 very-low-income units required by a density-bonus agreement.

The proposal would add 164 apartments in three 3–4-story buildings on a 3.2-acre parcel on the south side of Orange Avenue between Iowa and Alabama. Staff told the council the developer is eligible for a state density bonus that, combined with concessions, produces the requested affordable-unit set-aside of 50 very-low-income units; staff said the city would structure $1.5 million as a forgivable loan recorded by deed of trust and repaid to the general fund with principal and interest once other projects fund the inclusionary pool.

“The density bonus plus concessions are intended to equalize the lost rent,” said Kathy Head, president of Kaiser Marston Associates, the city’s consultant. “Without this monetary concession, this project is not financially feasible.”

Developer representatives described the units as dispersed across the entire Venue campus so affordable households live alongside market-rate residents and said the $1.5 million would be used primarily to cover permit-related costs when construction begins. “We are obligated to provide 50 very-low-income affordable units throughout the project site,” the developer said, noting the timeline calls for construction starting mid next year and an 18–24 month build-out.

Some residents and councilmembers warned about timing and risk. “If there’s a recession or the projects that will seed the inclusionary fund don’t close, we could be left carrying the loan,” Councilmember [functional_label: Council Member] Sausedo said, citing concerns about using short-term general-fund resources before expected inclusionary-fee receipts arrive. Public commenters raised traffic-safety concerns near nearby schools and questioned whether the planning commission had been fully informed about the loan.

Staff and the city manager said the interfund loan follows city policy, the city auditor and finance staff vetted the approach, and the loan term will not exceed five years with interest set at a rate consistent with the city’s idle-cash earnings. Director Garcia explained the loan would be brought back to council if material terms needed changing.

Council moved to consider the interfund loan first, adopted the loan resolution, and then approved the project entitlements and density-bonus agreement. Multiple councilmembers said they had reservations about timing but voted in favor, citing the opportunity to add 50 very-low-income units to Redlands’ housing stock.

The council also documented that the density-bonus agreement includes reporting and long-term affordability covenants; the affordability restrictions will run for 55 years once a unit is occupied by a qualifying household.

What happens next: staff will finalize the loan documents and the density-bonus agreement; building permits and final unit locations for the 50 very-low-income units must be submitted and approved before construction work begins.