Redoing VA Building 207 Could Cost Upwards of $24 Million

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UCLA was allowed to construct an artificial turf baseball field on the West L.A. Veterans Administration, next to the Jackie Robinson Stadium. It is unclear how this practice field helps homeless veterans. A youth baseball camp was being held on the field and those funds go to UCLA.

 

By REECE PASCOE

Driving on San Vicente past the West Los Angeles Veterans Administration (VA) last year there were at least 40 tents on the sidewalks, and lawlessness was rampant. Two members of the encampment were murdered.

Last November, under L.A. County Sheriff Alex Villanueva and his Homeless Outreach Service Team, veterans were finally moved inside the fence and housed in 48 tiny homes. The encampment outside the VA was taken down.

The homeless were put in tiny homes, because although Deputy Director for the Greater Los Angeles Healthcare System Robert McKenrick acknowledged that in the 2016 Master Plan, there were supposed to be 500 units of housing by fall of 2020, they were not ready.

The tiny homes on the West L.A. VA campus were surrounded by police cars and a security tent.

The newest proposal is retrofitting Building 207, which will cost more than $24 million, and uses HHH funds. When finished, it will house 59 Vets.

A brief history of the VA is needed to understand why there are homeless veterans.

The VA land was gifted in 1888 by businesswoman Arcadia Bandini Sterns de Baker and Senator John P. Jones to disabled veterans under the condition that “be thereon so located, established, constructed and permanently maintained.”

The VA was a place where Veterans would come from all over the United States and was initially intended for the soldiers who fought in the Civil War but expanded to those who fought in wars against the Indians.

In 1909, the property housed 3,000 Vets and was functioning as was intended.

In February 1971 the 6.5 Sylmar earthquake hit, and according to a February 2020 L.A. Times (“The 1971 Sylmar Quake Is Keeping Veterans Homeless in L.A. in 2020. That May Change Soon”), on January 1972, 30 of the 236 buildings were declared inhabitable and 1,460 residents were ordered to evacuate.

Congress appropriated more than $100 million to retrofit the buildings. The money went to a contractor who only retrofitted one building, and $35 million was spent on a kitchen for the hospital. The other buildings were left vacant.

Leases on VA land followed, which allowed UCLA to build the Jackie Robinson Stadium, Brentwood School to build its football stadium and athletic facilities, a laundry-services company to take over a building, a soccer club, a rent-a-car company, bus parking, a dog park and Breitburn Energy to drill for oil (the company donates just 2.5% of its revenue).

Now more than 100 years later, the property houses around 235 veterans, and when or if the 2020 Master Plan gets completed, it supposedly will house 1,200.

Why has housing capability been decreased by 60% – is it lack of housing, zoning or possible simply good-old fashioned corruption?

In 2018, Richard Scott who leased parking lots on the land was imprisoned for embezzling more than $13 million, and Ralph Tillman, a VA contract officer, was jailed for taking more than quarter of a million in bribes from Scott.

In 2019, Councilmember Mike Bonin made a motion to the L.A. City Council that VA Building 207, would issue housing bonds, not to exceed $24.3 million for renovating Building 207, located at Vandergrift and Bonsall Avenues. Building 207, an existing two-story structure, would have 59 units of affordable housing and one manager unit (visit: click here).

Now in 2020, the West L.A. VA Building 207 Project is authorized to receive $17 million in tax-exempt bonds and an additional $8.26 million from Prop. HHH with interest decreased from three percent to one percent. (Los Angeles voters passed Proposition HHH in 2016, which enabled City officials to issue $1.2 billion in bonds for the development of permanent supportive housing units.) click here

Construction source funding include Wells Fargo, HHH, NPLH, Reserves, a Developer Loan and 4% tax Credit Equity.

The $17 million comes from Wells Fargo. About $6.26 million will come from HHH.  Another $5.750 million will come from No Place Like Home (NPLH). In reserve is $462,665 and the developer loan is for $2.1 million.

Other sources of finance will pay off some of the Wells Fargo loan, such as the California Community Reinvestment Corporation (CCRC) who will pay $5.9 million, HHH will pay $8.26 million, NPLH will pay $5.75 million, a Deferred Developer Fee is $1,314,900. And Wells Fargo receives a 4% tax credit equity at $12,171,408.

The total to renovate a building to provide 60 units comes to $33,417,279, or $556,955 a unit.

The finances seem complicated going from an initial cost of $24.3 million to going to the $17 plus the $8.26 million from HHH to now $33 million.

It is the interest on the various loans. The first is a 2.6 % loan on the $17 million for 28 months, then the loan will be paid off from various sources.

Next the California Community Reinvestment Corporation (CCRC) will provide a new tax-exempt permanent loan in the amount up to $6.05 million. The CCRC permanent loan will have a 18/35-year term/amortization and a currently indicative interest rate of 3.4%.

The last is a loan on the HHH, HCIDLA will review and may approve an interest reduction from 3% simple to a minimum 1% simple interest rate for the Proposition HHH funds if determined necessary to strengthen the financial viability of the project.

All 59 housing units will be targeted to households whose median income is at or below 50 percent of the area median income.

About 13 units will be set-aside for formerly homeless Veteran seniors and 13 units will be set aside for formerly chronically homeless Veteran seniors. That means there will still be 33 units available, but one must be 62 or older to be considered.

The developer for the 207 Building is Thomas Safran & Associates Development, Inc. with more than 70 properties and 40 years of experience in construction.

The architect is KFA, LLP was founded in 1975, and lists more than 300 housing projects.

There are estimates that there are 3,600 homeless vets living in Los Angeles – on the low end – that make up about 10% of total homeless.

Housing 1,200 is the current VA goal, and officials said that, by the end of 2022, the area will have 235 “permanent housing beds” for veterans and another 315 by the end of 2024.

Yet financing is questionable and housing for Vets is behind schedule. The allotted projects will not house the number of reported homeless vets.

No wonder many advocacy groups don’t agree with the project. Dick Southern, director of the Vietnam Veterans of America regional chapter said, “all while indefinitely delaying the housing of disabled Veterans dying throughout Los Angeles’ finest neighborhoods.”

Building 205 (at the corner of Bonsall and MacArthur on the way to the Heroes Golf Club) on the VA campus is also under renovation.

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