News Summary
The San Diego City Council has approved a 60-year lease to convert the Asbestos-plagued 101 Ash Street into 247 affordable apartments for low-income families. The project, backed by MRK Partners and Create Dev LLC, aims to address the ongoing housing crisis by providing rent-restricted units for families earning 30% to 80% of the area median income. Concerns about costs and lack of competition have emerged, amid plans for additional commercial and childcare facilities to benefit the community.
San Diego – The San Diego City Council has unanimously approved a 60-year lease agreement with 101 Ash Venture LP to transform the Asbestos-plagued 101 Ash Street property into affordable housing. This groundbreaking project aims to convert the currently unusable high-rise into 247 rent-restricted apartments designated for low-income families. The development effort is backed by housing developers MRK Partners and Create Dev LLC.
The initiative will cater specifically to families with incomes ranging from 30% to 80% of the area median income, providing much-needed housing solutions amid an ongoing housing crisis. Each unit is estimated to cost nearly $1.1 million to develop, which has raised questions among some critics regarding the financial viability compared to nearby luxury developments.
In addition to residential units, the project encompasses three unrestricted manager units, 25,000 square feet of retail space, and a 4,000-square-foot childcare center, thereby contributing to the community’s infrastructure and supporting local economic growth.
Financial Overview
The San Diego City Council, under the leadership of Council President Joe LaCava, views the project as an essential step towards alleviating the financial burden of the 101 Ash Street building’s upkeep. The city has spent a total of $96.1 million on the property to date, covering maintenance and operational costs. This continuous financial burden underscores the urgency for a solution.
The lease agreement permits the developer to pursue $87.8 million in federal low-income housing tax credits later this year, contingent upon approval. An additional $36.1 million in historic property tax credits is also being sought, although the property is not classified as historic.
Overall, the project is expected to cost approximately $267.6 million. The City of San Diego will charge a base rent of $15,000 per year for the property, with annual increases based on either a 3% increment or the consumer price index. The city will not provide cash funding for the development but will issue a seller’s note valued at $45.6 million to aid in financing.
According to city financial analysts, this agreement is designed to protect taxpayers from ongoing financial drain while simultaneously addressing the city’s lack of affordable housing options. Furthermore, the city expert estimates a projected revenue gain of $90 million over the lease’s lifespan.
Developer Responsibility and Conditions
Despite the development and revenue opportunities presented, the project has faced scrutiny. Parents, community members, and some council members have expressed concerns about the substantial per-unit costs and the absence of a competitive bidding process for the property, raising alarms about potential procedural, economic, and ethical issues. Allegations of conflicts of interest related to the planning commission chair have also surfaced.
During the project’s construction phase, the city remains responsible for an ongoing $2.55 million annual maintenance expense for the uninhabitable building. This situation is expected to persist during the 24-month escrow period required for project completion and approval processes.
The city plans to retain ownership of the property even after the residential units and commercial spaces are operational, ensuring that the development continues to serve the community’s needs for years to come. Council members have emphasized the importance of meeting state and federal deadlines for affordable housing as a priority, positioning this project as a critical step in addressing San Diego’s affordable housing crisis.
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Additional Resources
- San Diego Union-Tribune: San Diego Agrees to Lease 101 Ash St
- NBC San Diego: City Council Approves Leasing 101 Ash
- Times of San Diego: San Diego Foundation 14 Million Affordable Housing
- San Diego Union-Tribune: Opinion on Housing Affordability Crisis
- Wikipedia: Affordable Housing
Author: STAFF HERE CORONADO
The Coronado Staff Writer represents the experienced team at HERECoronado.com, your go-to source for actionable local news and information in Coronado, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Coronado Island Film Festival, productions at Lamb’s Players Theatre, community workshops at John D. Spreckels Center, and iconic celebrations at Hotel del Coronado. Our coverage extends to key organizations like the Coronado Chamber of Commerce and Visit Coronado, plus leading businesses in hospitality, dining, and tourism that drive the local economy. As part of the broader HERE network, including HERESanDiego.com, HEREHuntingtonBeach.com, HERELongBeach.com, and HERELosAngeles.com, we provide comprehensive, credible insights into Southern California's dynamic landscape.
