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City passes on PATH proposal

Housing Authority rejects idea for veterans facility on former New Horizons property.

April 16, 2012|By Brittany Levine, brittany.levine@latimes.com

City officials have turned down a proposal from Los Angeles affordable housing developer PATH Ventures to build a veterans facility in South Glendale, citing its steep price tag.

During a closed-door meeting last week, the City Council, it in its dual role as Housing Authority, rejected PATH Venture’s roughly $1.4-million proposal to purchase a property on the 1200 block of South Maryland Avenue, formerly owned by the now-defunct nonprofit New Horizons.

The rejection was mostly motivated by a requirement in the proposal that the city fund the costs of the development.

“Financially, we didn’t think it was feasible,” said Mayor Frank Quintero in an interview Monday.

With Glendale’s Redevelopment Agency gone, the possibility for the deal has long been in flux. A state-mandated shutdown of local redevelopment agencies in February left Glendale with less funding for affordable housing and business developments.

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“We were extremely disappointed,” said PATH Venture’s Executive Director John Molloy. “We had high hopes, we thought we had everything worked out.”

PATH Ventures does not have another site lined up for the veterans housing project in Glendale, but it is looking for alternatives, Molloy added.

Under PATH Venture’s proposal, the city would get back the roughly $257,000 it granted to New Horizons, but Glendale would have to spend nearly $2 million to develop the affordable housing project, said J.P. John Perron, New Horizons’ real estate broker.

“There were too many conditions attached to it,” said city spokesman Tom Lorenz.

What will now end up happening to the site is up in the air as New Horizons works its way through bankruptcy court and another creditor, a construction company, considers foreclosing on the property.

“The funding from the city was necessary. After that fell apart, now it’s up to the courts to decide,” Perron said.

New Horizons — a nonprofit that provided child-care services to low-income families in Glendale from 1994 through last year — filed for bankruptcy in October after receiving more than $1 million in federal community development block grants and stimulus money for social services and capital improvements over the course of a decade.

It spent about $301,000 of city-allocated affordable housing funds for an expansion that never panned out. With the project now off the table, it must now pay the city the money back.

But as New Horizons slogs through bankruptcy, the city, George Hopkins Construction Co. and other creditors may have to elbow each other for the money.

“They can fight [in the courts] or they can hash it out,” Perron said, adding that New Horizons has tried to pay back its creditors claims based on their merit.

City Atty. Mike Garcia said in an email that officials were “still weighing our options with respect to the outstanding balance,” but declined to elaborate on what those options are.

George Hopkins Construction, which is owed $200,000, has recorded a lien against the property and is considering foreclosing on the site, said company President Gary Hopkins.

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