Despite Bankruptcy Filing, Proposed LTV Tower Redo Too "Important" For City to Let Go
The LTV Tower, as presented in redo plans dating back to '07
We've written a couple of times in recent months about developer Curtis Lockey's plans to redevelop the old LTV Tower on Pacific Avenue, but, truth is, the city's been working on making this a go project since at least 2007. And it hasn't been easy: Plans and proposals changed so drastically at one point about a year ago that the deal completely fell apart, and when Lockey returned to the Office of Economic Development, his new proposal, which relied heavily on an affordable housing component, "was a lot more complicated," says OED Director Karl Zavitkovsky.
And, as you may have seen this morning, it got a whole lot more complicated, as 1600 Pacific Building LP, the California-based partnership behind the project, filed for Chapter 11 bankruptcy protection earlier this week. Which means two years' worth of work is on hold while the partnership works with the court and with the city. As Zavitkovsky tells Unfair Park, "We'll stand by."
"Complicated" is too glib a word to describe this particular project, for which the developers initially wanted $123,287,952 in Downtown Connection Tax Increment Financing District money -- enough, essentially, to cover the entire cost of the rehab. The developers have long insisted theirs is a project that merits the money, as a large component of the project -- 236 of the proposed 600 apartment units -- will consist of afforable housing. The city whittled down the number to something far more managable -- around $45 million in TIF money, which the developers wouldn't see a penny of till 2015 at the soonest. "Nothing will get dispersed for a while, because [the money] goes to the bond obligations that have covenants that need to be covered," Zavitkovsky says, "which won't happen till 2014, 2015."
The Downtown Connection TIF board has been awfully malleable concerning this project, at one point rewriting the rules of the TIF to allow for the considerable affording housing component, which goes a long way with city officials trying to bring more afforable housing to downtown. (Though, as mentioned before, some council members have said privately they worry about putting too much afforable housing in one place. The city would like 10 percent of all downtown housing to qualify as "afforable," and the LTV project would eat up a big hunk of that.)
"We modified the Downtown Connection TIF rules to provide some additional assistance for people that are providing affordable housing in their projects," says Zavotkovsky. "There's a cost involved in doing that, because it costs you the same to put the units up, but the rents are significantly less."
From a December 2007 city briefing concerning the proposed redo of 16700 Pacific Avenue
Matter of fact, the Downtown Connection TIF board was scheduled to meet about 1600 Pacific Avenue last Friday, but couldn't get a quorum -- which is why items headlined "Pacific Avenue LTV Tower Project" were deleted at the last minute from both the city council's Economic Development and Housing committees' meetings scheduled for Monday. Shortly after that, Zavotkovsky got the call concerning the bankruptcy filing. Right now, the TIF board is scheduled to meet Monday, where, again, 1600 Pacific will be among the items up for discussion.
"The city very much wants to see more affordable housing downtown," Zavitkovsky says. "We are working hard to maintain the momentum downtown. We're focused on trying to get a lot of these older office buildings converted, and it's not easy. These guys have made a significant effort, and we've tried to work with them .I haven't always agreed with everything, but we've tried to working with them. For me, it's like everything else: There aren't easy deals in downtown redevelopment or adaptive re-use. They're all difficult, and they're all very difficult in this economic environmnt, so we'll work with people and understand there will be bumps in the road -- and some will be bigger than others. But this is an important building, so we want to explore every option."
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