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Pershing Hotel highlights new problem associated with end of redevelopment

By Omar Shamout
Published: Thursday, July 12, 2012, at 04:12PM
via google maps

The Skid Row Housing Trust says its Pershing Hotel property at Main and 5th Streets is long overdue for remodeling.

The Skid Row Housing Trust says the delay in refurbishing the Pershing Hotel into more modern, affordable housing space highlights another challenge created by Gov. Brown’s decision to shutter the state's 420 community redevelopment agencies.

Molly Rysman, external affairs director for the trust, explains that it’s not just a lack of capital that’s causing headaches.

“It’s not just about the dollars that aren’t there anymore. This was a huge government system that was in place that all of a sudden disappeared overnight,” Rysman said.

She said a number of state agencies, including the Department of Finance and the Los Angeles Housing Department, are figuring out what to do with the housing “assets,” or properties, that were previously controlled by the agencies -- which is stalling any new projects from moving forward.

Rysman says the Skid Row Housing Trust originally received a 25-year, $3.5 million loan from the agency in the late 1980s in order to refurbish the Pershing Hotel property. But now Rysman says the single-room occupancy [SRO] facility is due for another much-needed facelift.

Over the past several years, the trust has secured additional financing from both the state and city that would cover the improvements. The problem is that it can’t nail down the final piece of the puzzle: Low-Income Housing Credits. The group applied for the federal credits, but was denied because the community redevelopment agency that funded the loan is no longer around to reconfigure it.

“We need the terms of the loan to be adjusted,” Rysman says. “It’s the same interest rate; it’s the same loan; there’s no new money. It would be recast so that the dates of the loan coincide with the new financing that we’ve received.”

The group is proposing an overhaul of each unit in the dilapidated building that would replace the rooms with modern studio apartments that Rysman says are more suited to urban living, and she warns that if no action is taken soon, the hotel will “at some point turn into a building that’s no longer healthy for people to live in.”

“[SROs] are pretty undesirable today,” Rysman added. “Most people don’t want to share a bathroom and kitchen; they’d prefer to have their own apartment.”

The new “mixed-income” Pershing Hotel would also feature new commercial and green space, in addition to medical staff, mental health professionals and case managers to help homeless and formerly homeless tenants transition into their new home.

Rysman says the Pershing Hotel is not the only property facing this type of problem, and the bureaucratic confusion is hurting the city's low-income residents most.

“There are projects like ours that are ready to go, where the money is committed,” Rysman says. “We could be in construction in a few months, but we can’t because these issues have not been resolved.”

When Brown announced he would be closing the redevelopment agencies last year, he argued the state would save $2 billion in the next fiscal year that would be used to fund schools and public services such as police and fire departments.

But Rysman says affordable housing should not be thrown to the wayside as a short-term fix to solve the state’s budget issues.

“Just because it may take a few years to get a project going doesn’t mean there isn’t huge value to the community in the project,” Rysman says. “We’re talking about providing homes for people who could never afford a home in the market.”

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