7/16/03 After a lengthy and sometimes tense discussion, the City Council Tuesday night approved a ,70,000 low-interest redevelopment loan designed to help kick-start a ,4.7 million commercial project at the corner of North H Street and Ocean Avenue.

In a 4-1 vote, with Council Member Janice Keller dissenting, the council approved a loan to the Lompoc Housing and Community Development Corporation at 3 percent interest, deferred for four years, and secured only by the property Deed of Trust. The corner lot was purchased for ,225,000.

Council members acknowledged the riskiness of the loan, but were swayed by the potential impact that the project could have on the redevelopment of downtown and the fact that it would remain on the tax rolls. If successful, the project, a two-story, 32,000 square-foot office and retail building, could provide jobs and help make Old Town a destination point. The corner, a prime location, has been vacant since the 1980s.

"There really is an intact downtown that is waiting to be discovered," said Timothy Sales, of Adventure Studios, of Los Angeles, who is helping develop the project.

Keller complained that the city had received no audit of the corporation since 2001 and expressed concern that the group may have over extended itself with several low-cost housing projects.

"I would like it to move forward but not on an unsecured loan,// she said.

Sue Ehrlich, executive director of the non-profit agency, promised to provide the city with a list of its projects and the status of each. She said the office-retail project could be completed in about two years.

In other action, the council:

• Approved without discussion a ,7,000 donation to the Foodbank of Santa Barbara, which needs the money to build a 20,000 square-foot warehouse in Santa Maria. The Foodbank had asked for a gift of ,100,000.

• Approved a ,118,989 rebate to the Lompoc Unified School District for replacing 448 toilets and urinals in district schools. The new low-flush equipment is expected to cut the district/s water use by more than one-third and save the city 11.5 million gallons of water a year.

• Promised to look into a complaint by Rodger Rutherford, whose camper was towed from a city street by police last month. Rutherford asked the council to consider setting aside property for people to park overnight.

Staff writer Bo Poertner can be reached at 736-2313, Ext. 126, or by e-mail at bpoertner@lompocrecord.com