News Summary
The San Diego City Council has approved a 60-year lease for MRK Partners and cREate Development to transform the vacant 101 Ash Street building into affordable housing. The project will create 247 income-restricted apartments and 25,000 square feet of retail space, along with a childcare center. The redevelopment, costing $267.6 million, aims to provide housing for families earning between 30% and 80% of the area median income. Despite concerns regarding asbestos and project financing, city council members support the initiative to relieve taxpayers of the building’s maintenance costs.
San Diego – The San Diego City Council has unanimously approved a 60-year lease with MRK Partners and cREate Development for the transformation of the long-vacant 101 Ash Street building into affordable housing. This significant redevelopment initiative aims to convert the 21-story office structure into 247 income- and rent-restricted apartments, plus three unrestricted units designated for management purposes.
The project encompasses not only the transformation of the old office building but also includes plans for 25,000 square feet of retail space and a childcare center covering 4,000 square feet. The apartments will offer a range of options including studio, one-, two-, and three-bedroom units, specifically targeting families whose earnings are between 30% and 80% of the Area Median Income, with rent capped at 30% of their income.
Estimated at a total cost of $267.6 million, the project breakdown includes $45.6 million for acquiring the building, $40.7 million allotted for asbestos abatement and demolition, and $67 million designated for rehabilitation efforts. Presently, San Diego taxpayers incur an annual maintenance expense of $2.55 million for the now-empty office building.
The initiative is subject to a 24-month escrow period wherein the developers must adhere to specific conditions such as securing financing and permits and finalizing design plans. A proposed parking structure will accommodate 240 vehicles, meeting the needs of future residents and retail clients.
The childcare center integrated into the project will not pay any rent to ensure it can provide care at below-market rates, thereby enhancing community benefits. On average, the project is projected to yield $90 million in revenue for San Diego over the duration of the lease, aiding in the city’s financial landscape significantly.
Among the highlights, the Independent Budget Analyst’s office has reviewed the financing framework for the project, affirming its reasonableness while emphasizing the anticipated public benefits associated with the affordable housing it will provide. As part of its funding strategy, the development team is poised to apply for competitive tax credits and grants, aiming to begin their applications by September 2025. Potential funding sources are expected to include $87.8 million from federal low-income housing tax credits, $63.4 million from a financeable permanent loan, and $36.1 million from federal historic tax credits.
This development plan has faced opposition, primarily due to the building’s troubling history involving asbestos, resulting in public commenters advocating for its demolition rather than renovation. Nonetheless, the development team has pledged to responsibly manage the asbestos concerns during renovations and accept full responsibility for the structure’s maintenance once escrow concludes. Additionally, concerns have arisen from critics regarding procurement processes and potential conflicts of interest among project leaders; however, the city’s Ethics Commission has investigated and found no violations.
City council members acknowledged the previous mismanagement of the building and expressed their support for this lease agreement, primarily to alleviate ongoing financial burdens associated with the upkeep of 101 Ash Street. This accord represents a pivotal step towards redeveloping a long-empty site into a vibrant community resource, providing much-needed affordable housing options for San Diego residents.
Deeper Dive: News & Info About This Topic
HERE Resources
Action-Packed Weekend Awaits in San Diego
Weekend Events Showcase San Diego’s Vibrant Culture
San Diego City Council Approves Redevelopment for Affordable Housing
San Diego’s Genesee Avenue Construction Disrupts Traffic
San Diego Opens New Development Services Headquarters
San Diego City Council Approves Housing Complex at 101 Ash St
San Diego Home Prices Experience Modest Annual Increase
Vibrant Events Showcase San Diego’s Cultural Landscape
San Diego Struggles to Retain Recent College Graduates
San Diego Considers $267 Million Affordable Housing Plan
Additional Resources
- NBC San Diego: City Council Approves Leasing 101 Ash
- San Diego Union Tribune: City’s Ash Street Deal is Staggering
- Fox 5 San Diego: San Diego City Council to Decide on 101 Ash
- CBS 8: San Diego Moves Forward with Lease of 101 Ash
- Axios: San Diego Council Approves Affordable Housing at 101 Ash
- Wikipedia: Affordable Housing
- Google Search: San Diego city council 101 Ash Street
- Google Scholar: Affordable Housing Projects San Diego
- Encyclopedia Britannica: Urban Renewal
- Google News: Affordable Housing San Diego
