Pasadena Loses $11.1 Million Federal Stimulus Allocation
Pasadena Star News, Posted: 12/30/2010 03:55:42 PM PST
PASADENA – The city’s entire $11.1 million allocation of tax-exempt federal bonds, to be used for restoration of the historic Constance Hotel, has been forfeited, city officials announced.
The forfeiture was the result of the developers being unable to meet a Dec. 31 deadline to sell the bonds to investors, officials said.
The Recovery Zone Facilities Bonds cannot be reallocated to another project, City Treasurer Vic Erganian said last month.
Because Congress did not extend the deadline in year-end legislation, the funds are lost.
Richard A. McDonald, an attorney for developers Park Place Commercial, blamed delays caused by three “frivolous appeals” of the $76 million project at Colorado Boulevard and Lake Avenue for the loss.
The appeals were filed by Pasadena Coalition for Responsible Development. The last appeal was filed Dec. 13.
“Because of the appeals, we had no time” to sell the bonds, McDonald said Thursday.
The coalition includes Unite Here Local 11, which represents hotel workers, Michelle White of Affordable Housing Services, and Peter Dreier, director of Occidental College’s urban and environmental policy program.
The developer would have been solely responsible for selling and for payment on the bonds, McDonald said.
“We were prepared to do it in October, when there would be plenty of time, but because of the appeals there was no time,” McDonald said. “But the good news is that the project will be going forward anyway.”
Rachel Torres, a spokeswoman for the hotel workers union, did not return calls for comment Thursday.
The union paid almost $8,000 to file the appeals, which were denied both by the city’s zoning appeals board and by a hearing officer on Oct. 20.
The final appeal went to the City Council on Dec. 13. By taking no action on it, the council – minus members Jacque Robinson and Terry Tornek – upheld denials of previous appeals, effectively allowing the project to go forward.
The $76 million Colorado and Lake project, 880-940 E. Colorado Blvd., got the go-ahead from the city in October after a two-year process, but objections surfaced that same month.
Opponents argued that traffic and economic impact studies were inadequate, the hotel would provide only poverty level wages and it should become affordable housing – which was ineligible for the bond financing – or provide senior and disabled housing.
Mayor Bill Bogaard said Thursday he was “reluctant” to criticize the public process, but called the loss of stimulus funds a “lost opportunity” for the developer.
“It’s disappointing that we missed the opportunity to encourage job creation at a time when the economy needs every bit of help that it can get,” Bogaard said. “But the project will go forward, perhaps not as quickly and at somewhat greater cost than would otherwise be the case.”
Tornek, whose district includes the project, could not be at the Dec. 13 meeting. But he said Thursday that, although it was “too bad” the city lost the funds, everyone has the right of appeal.
“We have to be very careful to protect people’s right to speak,” Tornek said.
“A lot of what was said might not have been `on point,’ but we have to defend their right to say it … It’s too bad the financing is not available, but it’s better that people have the chance to speak up.”
The objections came “late in the day,” Tornek said, but raised legitimate concerns about the city’s response to tenants evicted three years ago by the then-owner of Pasadena Manor before the property was sold to Park Place Commercial.
McDonald said it was “sad” the ability to issue bonds had been lost.
“But we’re going to get the project done,” he said. “It will be great, and everyone will be proud of it.”
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