Council approves $6.7M funding commitment for affordable housing project at church property
By SARA HALL
City Council this week unanimously approved a funding commitment of approximately $6.7 million for an affordable housing project planned at the Neighborhood Congregational Church (NCC) property.
Councilmembers voted 4-0 during a special meeting on Wednesday (July 15) to approve the funding strategy for the development slated for the church property at 340 St. Ann’s Drive. Councilmember Alex Rounaghi was absent; he previously recused himself from discussions because of his prior employment with Related California.
The total city contribution will come from several different buckets, staff said, including restricted funds, fee waivers and deferrals.
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Rendering by KTGY Architects/Courtesy of NCC and Related California
A rendering of the view from Glenneyre Street of the proposed NCC and Related California affordable housing project
Related California, through NCC Laguna Beach Housing Partners, L.P., is proposing a three-story, 29-unit, 100% affordable housing development with a 41-space parking garage. Plans call for the demolition of the existing parsonage building and surface parking lot, but not the parish hall or church sanctuary. Montessori School will continue to operate.
“When I look at it, big picture-wise…the headline will be $6.7 million of assistance,” said Councilmember Bob Whalen. “That’s a big-sounding number.”
Still, considering all factors – including a landowner willing to commit the property and a developer that adjusted the plans in response to neighborhood concerns – Whalen said the project is worthy of support.
“I think we’ve got a pretty unique opportunity here, an excellent project, one that’s deserving of our support,” Whalen said.
He noted that $2.5 million of that number is the state grant.
“That’s grant money that we can only spend on housing and I think this project is an excellent candidate to receive that,” Whalen said. “We don’t have a lot of projects walking through the door. I mean, this is the only one that I can see on the horizon between now and the end of the next housing element.”
The deal also includes six public parking spaces, Whalen pointed out. He also highlighted the fee waivers, which is a notable non-cash piece of the total funding strategy.
Mayor Pro Tem Hallie Jones said the project helps the city meet state housing obligations while creating opportunities for people who contribute to Laguna Beach’s community fabric to continue living in town.
“It is the city’s legal and deeply moral obligation to contribute our resources to affordable housing and I think that this is the right way to do it,” Jones said.
She also shared a concern about the long-term preservation of the sanctuary.
The NCC project was first mentioned in May 2024 and plans have since been revised and scaled down several times following community input.
The project itself was approved by the Planning Commission on June 3; Tuesday’s council action focused only on the city’s financial contribution, staff emphasized.
The recommended $6.7 million city contribution will be structured as a 58-year residual receipts loan with 3% simple interest. The funding commitment remains contingent on the developer receiving an allocation of 9% low-income housing tax credits, securing remaining project financing and meeting all conditions outlined in the proposed funding commitment agreement.
Nearly 20 people spoke during public comment, most in support of the project.
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It’s important to care about housing for people earning lower wages right now, Susan Bond said, sharing stories of friends being evicted due to higher rents or local workers driving long commutes to work in town.
“The decline of our town will be the lack of affordable housing,” she said. “This should be a priority in our budget.”
This is a unique opportunity for Laguna Beach, said longtime local Elisa Stipkovich. She also noted that the project team has been extremely receptive to the community and has gone through a number of modifications since first being introduced.
Jacquie Schaefgen warned what the future of Laguna Beach would look like without affordable housing and the different types of people it allows to remain part of the community, including teachers and artists.
“This is what I want my taxpayer money to be used for,” she said. “I look at this as an investment in our town’s identity.”
While most speakers supported the project, some opposition remained. One speaker displayed a “HELL NO” sign, another questioned the city’s financial assistance and several letters submitted to the council raised concerns about the proposal.
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Sara Hall covers City Hall and is a regular contributor to Stu News Laguna.
