By Katrina Van Duzee/Garden Grove Journal
The Garden Grove City Council voted 5-0 to approve the purchase of land by the Garden Grove Agency for Community Development from the city, for the purpose of building low-income housing, at Tuesday’s meeting.
Currently in use as a parking lot serving the downtown commercial area, the land has in the past been the subject of an extended legal battle. A developer sought to build 100 condominium units on the location.
The project was opposed by the Garden Grove Downtown Business Association. The city and the developer eventually prevailed in court, but the project was never built.
This $2.3 million dollar purchase was made, in part, to meet a quota mandated by the California Community Redevelopment Law that states a cities development agency must spend 20 percent of the tax increment allocated to them on low-income housing.
The property being purchased is located at 12892-12942 Grove Street and totals 1.66 acres. It is currently considered residential/mixed use land; meaning residential housing and businesses could potentially be built on the property.
Businesses built on residential/mixed use land have to adhere to more stringent regulations because they are located in close proximity to residential neighborhoods.
The housing would not bestrictly low-income housing, but “housing with an affordable element.”
Although $2.3 million, my seem like a hefty chunk of cash for less than two acres, the staff report stated this was determined to be the fair market value, by a recent appraisal.
The funds to make this purchase will come from the redevelopment housing set aside fund.
Other business between the city of Garden Grove and the Development Agency included the approval of a cooperation agreement between the two government parties. This agreement spells out the details on how the Development agency will propose to pay back an excess of $21 million in loans borrowed from the city since the 1980s.
The city staff did not specify what projects the loan money was spent on, but did say they were used as advances on capital projects.
The agreement was approved to memorialize and provide a payment solution for two sets of loans to the agency, according to City Manager Matt Fertal. The first is a $21 million bond issue for capital projects and the second is a series of loans totaling $8.6 million. The agency has paid back some of the debt, but the remaining total to be paid back is around $21 million, which will include a 6.5 percent interest rate stated in the agreement.