Affordable housing may be too costly

Barbara Diamond

The affordable housing project on Glenneyre Street may get too

expensive to be built.

An environmental study indicates the presence of hazardous

materials on the site, previously undetected. The study commissioned

by the developer, Related Cos., revealed tetrachloroethylene, a

cleaning solvent used primarily in dry cleaning.

Cleanup could cost as much as $1.3 million if all the soil must be

removed to a hazardous waste disposal site. The cost drops to

$100,000 if a vapor extraction system could take care of the problem.

“In the worst case, the cost would be insurmountable, and the

project will be abandoned,” City Manager Ken Frank said.

The city has retained Environmental Support Technologies Inc. to

analyze the cost to clean the site and propose mitigation. An

insurance policy for pollution protection to cap the city’s clean-up

costs and limit future liability is being examined. Estimates for the

coverage range from $85,000 to $130,000.

In preparation for economically feasible remediation of the site

that would allow the project to go forward, the City Council voted

3-0 Tuesday to appropriate $148,000 from the city’s Housing in Lieu

Fund for environmental costs related to the project, appropriate

$111,000 from the Parking Fund to cover costs of three guest parking

spaces and about $263,000 from the fund for the revised cost of 19

public parking spaces.

The Parking Fund will be reimbursed for the costs of the guest

parking and a percentage of the parking construction costs attributed

to the project when -- and if -- projects such as Driftwood Estates

replenish the Housing in Lieu Fund.

Staff was to meet Wednesday with Supervisor Tom Wilson and ask the

county to waive its usual limits on affordable housing, Frank said,

adding that he wanted to be able to show that the city is putting all

its resources behind the project.

If an affordable housing project were not built on the Glenneyre

Street property, the city would be obliged to restore the purchase

price of $700,000 to the in-lieu fund.

The parcel could then be used for other purposes, such as public

parking.

The city’s goal was to provide housing for people with very low or

low incomes, preferably those who live or work in town. A percentage

of the units will be reserved for people with incomes at or below

$7.62 an hour. The remaining units, except for the on-site manager’s,

will be reserved for persons with incomes at or below $10.17 an hour.

City officials voted 3-0 in 2002 to approve a 27-unit project,

which would fulfill the state requirement for low-income housing in

Laguna Beach. It included a heavily landscaped “Craftsman-style”

facade with 26, single-occupancy rental units, one on-site manager’s

unit and underground parking for 50 vehicles. Parking spaces were to

be divided between the residents and the city.

The number of units per square foot of property exceeds the norm

allowed in the city, and the number of parking spaces is below the

usual requirement, both approved under special circumstances

permitted as incentives for the construction of low-cost housing.

Council members Wayne Baglin and Cheryl Kinsman have recused

themselves from any votes on the project because each owns property

within the 500 feet of it, legally creating a conflict of interest.