CALTRANS Site a Hot Property

By Annakai Geshlider  — Pasadena Star News   Aug 1, 2021

Current tenants, affordable housing advocates and developers are vying for ownership of a Caltrans-owned building in South Pasadena.

The property, a 12-unit multifamily building at 626 Prospect Ave., is one of approximately 200 properties acquired by the agency during the 1950s, ’60s and ’70s to make way for a 6.3-mile extension of the 710 freeway through Pasadena, South Pasadena, and El Sereno. After 60 years of activism fighting the freeway, the Los Angeles County Metropolitan Transportation Agency nixed the proposed extension in November 2018.

The next year, current tenants and various developers submitted proposals to purchase and develop the property into affordable housing. Proposals had to adhere to the Roberti Act, a state bill specifically created to deal with surplus housing owned by Caltrans in the wake of the canceled 710 freeway extension.

Signed in 1979, the bill declares the sale of certain surplus residential properties must “directly serve an important public purpose,” and “preserve, upgrade and expand the supply of housing available to affected persons and families of low or moderate-income,” according to state code.

Pasadena Friendship wants to increase affordable housing during a time it is much needed, Pastor Lucious Smith, who also serves as the nonprofit’s president. “We are committed to keeping all 12 units affordable.”

Pasadena Friendship would allow current tenants to continue renting their units after renovation. But the current tenants — who occupy four of the 12 units and have lived at the property between 10 and 30 years — have different goals.

What the tenants want

“I want to be a homeowner,” said Candice Jackson, a Pasadena native who has lived there for 15 years. Jackson and her fiancée, Jaime Baeza, say they love living in the building despite frustrations with Caltrans as their landlord.

“We know everybody. We’re really tight,” said Baeza, 50, a handyman. Because of Caltrans’ “neglect,” Baeza said, fellow tenants now call on him for maintenance requests. He trims trees, cleans carports, waters plants and changes showerheads.

“It’s been a wonderful place to live,” said Sean Abajian, who has lived in the building for 10 years. Abajian and fellow tenants teamed up with the city of South Pasadena and nonprofit developer heritage Heritage Housing Partners to submit a proposal to Caltrans, which was denied.

The proposal would have developed 626 Prospect Ave into for-sale units:10 affordable and two at market rate. The sale of the latter would have subsidized the building’s much needed repairs, Abajian said. The affordable units would be priced at different tiers within the affordable housing range, targeting extremely low to moderate-income households.

For tenant Sam Burgess, 78, transforming the building into for-sale units would provide much-needed tax money to the city, which would not be possible if a nonprofit purchased the building. “Caltrans has not paid a penny in taxes since the 1960s,” he added.

Burgess, who began protesting Caltrans’ proposed 710 freeway expansion starting in 1974, believes the battle with Caltrans won’t be over until the units are sold. A retired stage, directing, and road manager, he has lived there for 30 years. Like fellow tenants, Burgess said significant building repairs are necessary. The tenants’ proposal for developing the building included $100,000-per-unit for repairs, he said — not to mention overdue sewer, water and electric repairs.

Burgess is not alone in questioning Caltrans’ handling of properties in the 710 corridor. After the freeway extension project was blocked in 2018, Caltrans agreed to sell properties in the corridor at affordable housing rates. When Caltrans adjusted those rates to meet inflation, a group of 710 corridor tenants sued the agency, arguing Caltrans was violating the Roberti Act.

The tenants alleged the inflated rates did not include them as low-income renters, and they should be able to purchase the homes at original prices. Caltrans originally paid for the properties in the 1960s. By March 2019, the tenants won — allowing their families to own the homes many of them had lived in for decades.

What the city of South Pasadena wants

After Caltrans awarded a bid to Pasadena Friendship in November, the nonprofit entered the process of purchasing the building. Then, on June 2, the city of South Pasadena filed for temporary restraining order to prevent Caltrans from selling the property to Pasadena Friendship. Escrow was supposed to close July 2.

The city alleges Caltrans violated the Roberti Act by offering the property to Pasadena Friendship instead of giving current tenants the right to purchase, according to documentation from the July 1 ruling. The Roberti Act requires multifamily housing owned by Caltrans to be developed by designated “housing-related entities.”

In its proposal, Pasadena Friendship said it would work with a private, nonprofit housing-related entity affiliated with the church to purchase the property and transform it into affordable housing. The city says it should get priority because its own Housing Authority is a public housing-related entity.

In a bid submitted the same time as Pasadena Friendship’s, the city had vowed to team up with private developer New Prospect Development, an LLC formed by tenants of 626 Prospect Ave., and private nonprofit developer Heritage Housing Partners.

In a July 1 tentative ruling putting the sale on pause, Los Angeles Superior Court Judge Mary H. Stroebel said the Roberti Act does not explicitly prohibit a public housing-related entity, such as the South Pasadena Housing Authority, from purchasing a property and transferring it to another entity, such as Heritage Housing Partners.

With the temporary restraining order granted, a court hearing has been set for May 17.

For Pasadena Friendship, the city’s efforts to stop the sale came as a shock. The organization worked thoroughly to comply with the regulations given to them, to “dot every i, cross every t,” Smith, the church’s pastor, said. Pasadena Friendship reached out to the city to discuss the project, inform the city of the project’s goals, and asked if the city wanted to “engage in partnership” for the process — only to be met with no response.

“We’re not going in there trying to jack up rents,” Smith said. “Our commitment is to provide affordable housing, not to make a profit.”

According to a news release, Pasadena Friendship had opened escrow and complied with all the conditions of the Roberti Act — including offering the property to tenants for purchase — by the time the city filed suit. Pasadena Friendship may have to restart its purchasing process because of the length of time between now and the hearing.