Feb. 13 2013 09:58 AM

Sale of low-income senior housing moves forward, slowly

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SD Square parking lot
Photo by Kelly Davis

It's been more than a year since residents of San Diego Square heard there was a buyer for their building, and it'll be another year before the sale's finalized. Though it's frustrating for tenants, the sale could be good news for affordable housing.

San Diego Square's on a Downtown block of city-owned land; its 154 units are subsidized by the Department of Housing and Urban Development (HUD) for low-income seniors 62 and older. Since 1979, the city's leased the land, for $1 a year, to Kind Corp., a nonprofit headed by Mauvorneen O'Connor, twin sister of former San Diego Mayor Maureen O'Connor.

As CityBeat's reported, San Diego Square's tenants have lodged complaints against Kind Corp. ranging from bug infestations that went untreated to threats of eviction. Residents can't use the building's recreational space or parking lot, forcing seniors to either give up their cars or park blocks away.

In October 2011, Housing Development Partners (HDP) announced plans to buy San Diego Square; HDP Executive Director Marco Vakili expected the sale would take a year. But getting approval from HUD, negotiating with Kind Corp. and drawing up a new lease with the city took longer than expected. Only last Wednesday did the City Council's Land Use & Housing committee approve a new lease, the first step to getting full council approval. Once that happens, it'll take another year to secure low-interest loans to rehab the 30-year-old building, Vakili said. 

Tenant Chuck Miller said he's disappointed with the delay. "Right now, we are the only [senior] apartment complex in the San Diego area that does not have a social area to meet," he told the committee. "There was one, but they locked the doors on it eight years ago."

The new lease, which takes effect in 2014, says HDP will pay the city $4 million up front and, annually, half the net rental income from the property's commercial space and a small portion of rent from the residential part of the building. Tenants' rents won't be affected, Vakili said.

That might sound steep, but Vakili said the city could get a lot more money if there was a market-rate building on the property.

"They're pledging their land for 65 years for below-market value," Vakili told CityBeat.

At the committee meeting, City Council President Todd Gloria asked if the $4 million could be earmarked for future affordable-housing projects. When the state ended redevelopment last year, with it went a significant affordable-housing funding source.

Yes, said Jim Barwick, director of the city's Real Estate Assets Department. "How it's spent is up to the mayor and council."


Email kellyd@sdcitybeat.com or follow her on Twitter at @citybeatkelly.

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