MAIN STREET — Amid all the buzz surrounding a series of future projects meant to reactivate the Civic Center comes news that construction for a major housing development could face delays for up to a year.
The ground breaking for the Civic Center Village has been pushed back to July 2010 as the developer, Related/Santa Monica Village LLC, has experienced challenges in securing financing for the project, causing uncertainty as to whether it could meet the original construction start date this summer, according to a recent staff report from City Hall’s Housing and Economic Development Department.
Sitting just to the northwest of the Rand Corp. on Main Street, the Village is considered a key component to the overall vision for the Civic Center where a slew of new projects, including the Palisades Garden Walk and renovation of the Civic Auditorium, is expected to give the area a new identity.
The Civic Center has been in the spotlight since city officials recently unveiled several proposals that they were exploring for the area, including capping the I-10 Freeway to create more open space, constructing a roundabout in front of the Rand Corp. to improve circulation, and creating a gateway plaza near the Exposition Light Rail terminal at Fourth Street and Colorado Avenue. City officials also recently presented a list of priority projects that they suggested should be funded through the Redevelopment Agency, including shared public-use facilities at Santa Monica High School and the Civic Center Early Childhood Development Center.
The only residential development slated for the area, the Village will have approximately 10,000 square feet of retail space and 324 residences, including a mix of market-rate condominiums and affordable-housing apartments for low-income families and artists.
Several issues arose late last year when the California Multifamily Housing Program, which assists in the construction and preservation of housing for low-income households, announced it would preliminarily award $10 million in financing to the Village project, only to have state officials freeze the funds soon after because of budget issues.
“It created uncertainty as to whether the $10 million would be forthcoming,” Jim Kemper, the housing administrator for City Hall, said.
The economic downturn has also created challenges for the project in other financing mechanisms, including with bank loans and tax credit equity, which comes from private investors.
“The banks didn’t even know if they would survive let alone lend money,” Kemper said.
The project was expecting to receive about $22.3 million through private investors, $5.1 million from the bank, $1.3 through deferred developer fees, and $10 million from the state Multifamily Housing Program.
The total cost of developing the site as of last June when the City Council approved the development agreement is projected to be approximately $248 million.
There has been some good news that might help the Village move along, including the recent announcement that the state has received enough money to fund some projects.
The delay could work out in the developer’s favor as construction costs continue to go down, Kemper said.
“A lot of folks are looking for work and as demand for materials decreases, the price for them will also decrease,” Kemper said.
The new opening date of the Village, which is estimated to be under construction for about two years, will also bring it closer to the anticipated completion of Palisades Garden Walk in 2012. The park will be built directly to the north of the residential development.
“I think it will be a great amenity for the future residents there,” Andy Agle, the director of Housing and Economic Development, said.
The one project that could be impacted by the delay is the extension of Olympic Drive to Ocean Avenue, which cannot be constructed until after the Village is completed.
As the only housing development in the Civic Center, Agle said the Village will play a critical role in keeping the area alive well after the various surrounding government facilities, such as City Hall and the Santa Monica Courthouse, close.
“It’s a great way to create activity in the evenings and the weekends,” he said. “It creates eyes on the street and eyes on the park.”