By LESTER CHANG
The Sunnyvale City Council has turned down a $1.2 million loan request from a San Jose housing group to develop a 30-unit apartment complex on Weddell Drive.
By a 4-3 vote, the council on Dec. 17 denied the request from First San Jose Housing for $600,000 from the city's housing mitigation fund and another $600,000 in federal funds controlled by the city for the development of affordable housing.
First San Jose, a nonprofit organization, had planned to secure other funds to pay for the rest of the project, which was estimated at $4 million.
The council's action comes at a time when the city is attempting to encourage the construction of more affordable housing units. The project would be geared for "low- and very-low-income families."
But Sunnyvale doesn't need more high-density apartment units, said Mayor Stan Kawczynski, who cast the deciding vote against the loan.
"The project doesn't belong in the city of Sunnyvale," he said, adding that the idea of renting units to low-income residents in cities is dated. According to Kawczynksi, the new trend is for low-income residents and others to buy apartments or condominiums.
In the wake of the vote, John Brezzo, a board member with First San Jose, said his board will have to decide whether or not to go ahead with the project
First San Jose wanted to use the funds--structured as part of a 30-year loan at a 3 percent interest rate--to acquire the land for the project and to construct the apartment units.
The remainder of the funds would come from low-income tax credits and tax-exempt bond financing, the developer said.
Councilman Jack Walker said he wasn't comfortable with the idea of lending money until the developer could provide more detailed information about the project.
The plans have yet to be sent to the city's Planning Commission for review.
Councilmembers Landon Curt Noll and Jim Roberts said the city has not adequately inform enough residents about the proposal, although city officials said otherwise.
"We need to notify the neighbors," Walker said. "It has been my experience that when you don't, you get severe opposition."
City officials said that more people will be notified when the project goes through the permit process.
Councilmembers Robin Parker, who voted to award the loan, said the group has a solid background in developing projects. First San Jose Housing, whose focus is to develop affordable rental and ownership housing for families, has developed five affordable housing projects since it was incorporated in 1986.
One of its projects has won a national award for home building, according to city documents.
Awarding the loan would enable the city to use the federal housing funds it administers, according to city housing officials, which recommended approval of the loan.
If the funds aren't used, they could be allocated to other cities and used by them for housing programs, said Dyane Matas, the city's Housing and Neighborhood Preservation Officer.
The project provoked opposition from Paul Popoff, who owns an apartment complex next to the site of the project. If it were developed, the project could affect his ability to rent his units, she said.
Lauren Brewer, a project manager with the housing group, said the rental rates for project are lower, but would help provide housing for people with less income. The project also is geared for families that are larger than those that would rent from Popoff, she indicated.
According to city documents, the project would consist of one-to-three bedroom apartments, and the rent would range from $595 to $986 a month.
This article appeared in the Sunnyvale Sun, December 25, 1996.
©1996 Metro Publishing, Inc. All rights reserved.