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Officials hope to salvage ADI plan

City works on an affordable housing project to replace canceled Central City Lights.

May 05, 2011|By Melanie Hicken

CITY HALL — Amid legal efforts to recover millions in alleged construction overcharges from a Los Angeles-based affordable housing developer, officials are also moving to iron out complications related to a fifth Glendale project planned with the firm.

The developer, Advanced Development & Investment Inc., is under federal fraud investigation for allegedly bilking cities out of millions with inflated construction invoices. Glendale paid ADI roughly $34 million since 2005 for four projects in south Glendale — some of which the city is trying to recover through a lawsuit filed in Los Angeles County Superior Court.

The City Council had voted last year to commit an additional $6.3 million for a fifth ADI project — Central City Lights at 327-331 W. Salem St.

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Plans for the project were canceled amid the federal investigation, and city attorneys are still working to buy the Salem property ADI acquired by using a $1.1-million loan from the city.

On Monday, Chief Assistant City Atty. Mike Garcia attributed the hold-up to concerns that the city could lose out on $3.1 million in federal funds attached to the Salem project, which must be transferred to another planned development by July 31.

“Before we actually cancel that transaction, we need to have another project in its place,” he said.

City housing officials last week received the green light to move forward with a proposed affordable housing development for military veterans and their families, to be built in conjunction with Glendale Memorial Hospital at hospital-owned property in south Glendale.

Officials will try to transfer the federal funds to that project and then move to acquire the Salem land.

City attorneys have said the city is not at risk of losing the land to ADI because the loan was secured by a deed of trust on the property.

City Atty. Scott Howard told the Housing Authority last week that officials were “moving as quickly as we can” to acquire the property.

City housing officials have said the Housing Authority can then consider using the property and an adjacent city parking lot for another future affordable housing development.

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