The transformation of the long-vacant building at 107 Ash St., formerly known as 101 Ash, into affordable housing is moving closer to reality. The development team has lined up the project’s financing, including federal financing and tax credit investments, and is working to finalize the financial closing needed to begin construction.   

On Sept. 15, the San Diego City Council will consider minor amendments to the existing Ground Lease Disposition Agreement to align the agreement with the project’s final financing and development structure. 

Under the agreement, 101 Ash Venture LP plans to transform the vacant office building into 249 income-restricted affordable homes for households earning between 30% and 80% of the area median income. The development will offer studio, one-, two- and three-bedroom homes to accommodate a range of household sizes.  

Among the amendments that the City Council will consider is an increase in the number of residential units from 250 to 252, including three unrestricted manager units, as well as an extension of the ground lease from 60 to 65 years. The additional five years support the project’s tax credit financing structure, while also extending the affordability period, ensuring the homes remain affordable for the full 65-year term.   

With financing lined up, the project is moving toward closing and construction. The development team is working with the City to complete the necessary remaining steps. In anticipation of the site’s redevelopment, the property’s official address has changed from 101 Ash to 107 Ash.  

In addition to the income-restricted units, the project will activate the property with approximately 25,000 square feet of commercial space and a 4,000-square-foot childcare center for children ages 0 to 5. 

The developer has lined up a combination of public and private financing for the project and is working to finalize the financial closing. The City is not providing new cash funding for construction. Instead, the City will retain ownership of the property and provide a $45.6 million note reflecting the value of the existing building. The note will accrue interest at 5% annually and will be repaid over time through the City’s share of project residual receipts. The City will also receive ground rent and other potential payments over the 65-year lease term. 

Under the agreement, 101 Ash Venture LP will lease the property in its existing as-is condition and will be responsible for all work necessary to redevelop the property, including environmental requirements, design, entitlements and construction, as well as on-going maintenance and operations.  At the end of the proposed 65-year lease, the City will retain ownership of the land and receive the fully improved building, providing long-term benefits for the community.