Tropico Apartments, a five-story residential structure and six-story parking garage at 435 Los Feliz Road, won approval by a 3-2 vote Tuesday, with Councilman Ara Najarian and Councilwoman Laura Friedman dissenting.
Before voting, the council rescinded a motion from last month requiring Mill Creek Residential to trim the number of units by 25%. The developer managed to combine only five studio and one-bedroom apartments to create five new three-bedroom units, a reduction of about 2%.
Mill Creek’s managing director, Michael Genthe, said complying with that request would have killed the deal to purchase the 2.25-acre lot and to build on it.
Real estate advisory firm Keyser Marston Associates was hired to examine Genthe’s claim and found that at its current density, Tropico Apartments would be valued at $76.2 million after it was built and create a 10% return on investment, said Senior Principal Jim Rabe.
Losing 25% of the density would promise only a 3% return, he said.
“From a developer’s perspective, from a property owner’s perspective you’ve got two choices: Do I invest in something that I could get a 10% return on or invest in something that I get a 3% return on?” Rabe said. “That’s the context of infeasibility.”
The council also approved a parking exemption that would allow Mill Creek to build a six-story structure to house 367 spaces, which is short of what the city would require by 132 spaces, according to a staff report.
Najarian, who’s opposed Tropico Apartments since it first went before the council, pointed to the development’s environmental impact report and noted his fellow council members that the development would bring several negative impacts to the neighborhood such as delayed police and fire response times and more drivers.
“You have put the profits of the developer in front of police protection, in front of fire protection and of park space and also of traffic and transportation,” Najarian said.
When it comes to traffic, Mayor Zareh Sinanyan said it would be a bigger issue for the city of Los Angeles given that Tropico Apartments would sit on a border with Glendale.
He added that he didn’t see any tangible evidence of a negative impact that the project would bring to the neighborhood.
“So every time someone comes to Glendale from the southwest, the first thing that they see is that plot and I just don’t see how we could leave that property the way it is and consider it as a positive step for Glendale,” Sinanyan said.
Follow Arin Mikailian on Twitter: @ArinMikailian.
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