Costa Mesa drops legal action against Santa Ana nonprofit
Costa Mesa has dropped its legal action against a Santa Ana-based nonprofit stemming from loans the city provided two decades ago to secure 30 affordable apartment units on the Westside.
During a closed-session meeting Tuesday, City Council members voted 4-0-1 to end the city’s litigation against Civic Center Barrio Housing Corp. Mayor Pro Tem Sandy Genis abstained.
“The litigation had become a money pit, and we felt it was best to cut our losses and move on,” Mayor Katrina Foley said Friday.
No one at Civic Center Barrio could be reached for comment by phone or email this week.
Costa Mesa took the organization to court in 2014, alleging Civic Center Barrio had failed to meet its “contractual and financial obligations to the city,” according to a news release from 2015.
In the 1990s, the City Council agreed to lend Civic Center Barrio money to purchase and develop 30 affordable housing units along the 700 blocks of James and West 18th streets.
In the years that followed, however, Civic Center Barrio “repeatedly failed to fund capital improvement projects” and didn’t properly pay back the loans, according to the 2015 news release.
“After several attempts to work with the housing corporation, the city was forced to put the properties in foreclosure,” that release states.
Costa Mesa acquired the units in foreclosure sales on Aug. 28, 2015, and Feb. 1, 2016, by issuing credit bids of roughly $4.5 million.
“We were successful in taking over the properties so that we can continue to provide quality affordable housing,” Foley said.
The city still owns the units but a separate company, ProActive Realty Investments Inc., operates and manages them. All but three of the units are currently occupied by low- and very low-income tenants, according to city spokesman Tony Dodero.
Affordable housing has recently been a topic of much discussion in Costa Mesa.
In May, the council considered, but ultimately decided against, a proposal to put a $20-million, affordable-housing bond up for a vote in November’s election, citing a lack of specifics.
The month prior, the council eschewed the idea of an inclusionary housing ordinance, which could have required developers of certain residential projects to incorporate affordable units or pay fees to the city instead.
Affordable housing advocates have also decried a program included in the latest update to the city’s general plan that offers incentives to owners of some motels along Harbor and Newport boulevards to demolish their businesses and build high-density apartments.
The Kennedy Commission, an affordable-housing advocacy group based in Irvine, filed a lawsuit last year seeking to block a city-approved project to tear down one such motel, the Costa Mesa Motor Inn, and replace it with 224 high-end apartments.
That lawsuit alleges the city approved the project without providing relocation plans or appropriate assistance for the low-income residents who would be displaced.
That lawsuit is ongoing and scheduled to go to trial in May. The 236-room motel, at 2277 Harbor Blvd., is now officially closed. The last residents there moved out in November.
Twitter: @LukeMMoney
