DOWNTOWN ‚Äî Two long-shuttered apartment buildings on Fifth Street are open for business, closing the door on a dubious legacy left by a former developer who defaulted on promises to City Hall and his business partners.
The buildings, located at 1420 and 1430 Fifth St., are now owned by NMS Properties, one of the largest housing developers in Santa Monica.
Once closed to the outside and covered in scaffolding and unattractive tarp, the $22 million project is now complete after almost three years of negotiation and work for developers, a bank and City Hall.
Jim Andersen, president of NMS, considers the end result a triumph of process that fits both nicely in the NMS portfolio and with the culture of Santa Monica.
“Residents will be able to live, work and play without ever needing to get in their cars,” Andersen said, referencing the central Downtown location. “This is part of our vision for walkable destination apartments for lease in Santa Monica.”
They are already 30 percent leased, Andersen said.
NMS bought both buildings from Bank of America after the bank took them from developer Craig Jones, Andersen said.
Jones, who allegedly skipped the country in 2010, left City Hall in the lurch on dozens of units of affordable housing that he promised to build in conjunction with the market-rate apartments.
Also lost was a $1.1 million security, which had been promised to City Hall if the affordable housing was not developed.
City Hall secured promises from NMS to build some of those units in a series of settlement agreements. All of the affordable housing that JSM Construction, Jones‚Äô company, should have built is now included in developments at 1650 Lincoln Blvd., 1660 Lincoln Blvd. and 1437 Fifth St.
The last is immediately adjacent to the two market-rate buildings that recently opened.
When NMS took the two properties over from Bank of America, they were in shambles.
Jones had gotten roughly halfway through construction when he lost control to the bank, leaving the buildings without a roof.
“Banks are good at lending money and letting other people do stuff,” Andersen said. “When a bank takes over a construction project in the middle of it, they make terrible decisions.”
One of those was to leave the building open to the elements during Santa Monica‚Äôs rainy season. While one of the city‚Äôs main selling points is its mild climate, allowing the interior of a building to sit exposed to the elements is not a recipe for success.
NMS took over and rehabilitated the buildings. The company, known within city circles for its sub-450 square foot apartments, was now in possession of properties exclusively planned for one and two-bedroom units.
The buildings include 100 units, ranging from 525 and 1,395 square feet, according to a release. The rents begin at $2,695 for one-bedroom units and $3,795 for two-bedroom units.
Although some of the floor plans were massaged for greater efficiency and the company swapped in some longer-lasting materials than those called for in the bank‚Äôs plan, NMS stayed true to the original design of the apartments, Andersen said.
“We spent months fine-tuning how the building would have to look,” he said. “We changed some items, but kept to the spirit of the drawing presented to the (Architectural Review Board).”
The size and design of the apartments are new to NMS, but complement the company‚Äôs portfolio of apartments in Santa Monica, Andersen said.
That assortment will likely grow within the next few years as the company has nine projects waiting to go before various boards and commissions in Santa Monica.