For more than two decades, the San Diego Housing Commission has occupied a converted warehouse on Newton Avenue in the corner of East Village, just across the street from where Barrio Logan begins. The number of people the city's public housing agency serves has increased by at least 10,000 since then, and its staff, too, has doubled.
The building, however, has barely held up.
When plans to renovate the building looked to be too costly, in 2003, the Housing Commission agreed to purchase a five-story building in the so-called "Smart Corner" development currently being built downtown on the block bounded by Park Boulevard, C Street, 11th Avenue and Broadway. The city's Housing Authority (the City Council, wearing different hats) approved the purchase.
In order to pay for its new digs, in October 2004 the Housing Commission started looking for a developer who could immediately purchase its old headquarters but would agree to hold off on redeveloping it and instead lease the office space back to the Housing Commission until the Smart Corner building became available in late 2006.
The Housing Commission put out a formal request for offers on the Newton Avenue property and received only one, from Carlsbad developer Concordia Communities. Concordia agreed to buy the property for $6,050,000-it was appraised at between $6 million and $7 million-with plans to eventually raze the building and build 300 condos in its place.
There was one problem: Concordia had no plans to set aside 10 percent of those condos as affordable housing for families making roughly $63,400 or less annually-as city law mandates-and instead opted to pay an in-lieu fee. A Housing Commission spokesperson said making a certain percentage of affordable housing a condition of the sale would have resulted in a lower selling price.
The idea that the Housing Commission would make a deal with a developer that didn't include affordable housing didn't sit well with members of the City Council, and, in May, acting as the Housing Authority, the City Council ordered the Housing Commission to bring the Centre City Development Corporation (CCDC), the agency responsible for downtown redevelopment, into the mix to discuss ways to add more affordable housing to the project.
On Sept. 7, CCDC's Real Estate Committee considered a new proposal from the Housing Commission and Concordia. Under the revised plan, Concordia would still pay more than $6 million for the property but would build only 150 condominiums, of which 10 to 20 percent, or 15 to 30 units, would be "affordable." They asked CCDC to help subsidize the cost of some of those affordable units.
Wayne Raffesberger, a member of the CCDC board of directors, said that meeting was the first time he'd heard of the project. He didn't like the sense of urgency with which it was being pushed, he told CityBeat this week. Moreover, despite nearly universal agreement on the need for more affordable housing downtown, he said the proposal failed to provide enough and he didn't like that the developers were asking CCDC to foot the bill. Led by Raffesberger, the Real Estate Committee asked Concordia and the Housing Commission to rethink their plan and bring it back for reconsideration in November.
In the meantime the revised proposal went before the Housing Authority on Sept. 13, where it received an icy reception from City Councilmember Jim Madaffer.
"It's just amazing that we are doing this on a site that is run by the Housing Commission, which is supposed to be finding affordable housing for people," Madaffer said. He also questioned the sale price, which he found to be too low for the area.
"Property within two blocks of this site is going for $200 a square foot, yet this property is being sold for $67 a square foot.... The question is: are we just providing a $12 million subsidy... to the developer?"
Madaffer told the Housing Commission and CCDC staff that he wanted to see a proposal that included 100 percent affordable housing and one that simultaneously kept the land in the public trust-ideally, he wanted CCDC to buy the property outright and lease it to a developer, who would build the affordable project in exchange for a $1 annual lease for 55 years.
Dale Royal, a senior project manager with CCDC, said asking CCDC to foot the bill could impact its ability to fund other affordable-housing projects. Royal also said Barrio Logan community leaders had expressed interest in increasing the neighborhood's stock of market-rate, rather than affordable, housing.
But Rudy Gonzalez, project manager for the Barrio Logan Redevelopment Area said he's not aware of any push for more market-rate housing in that area. "I hear more about the need to maintain affordable housing stock where residents can live," he said.
At the $67-per-square-foot sale price, he said he'd expect to see more affordable units.
"If this is prime, ready-to-develop property adjacent to the East Village selling at $67 per square foot, they should be able to build at least 20 percent or more affordable housing without a subsidy [from CCDC] because the subsidy they are receiving went into the price of the land."
At the Sept. 13 meeting, Madaffer wanted to put off voting on the sale for 90 days and send the parties back to the drawing board a second time. Carrol Vaughn, the Housing Commission's chief operating officer, pointed out that there was a Sept. 30 deadline attached to the deal with Concordia. At that point, Concordia will be free to ask for its deposit back. Madaffer then asked for the matter to come back for a vote on Sept. 27; he said he'd try to work with CCDC in the interim.
Neither Madaffer nor a representative from Concordia responded to requests for comment by press time.
Janice Weinrick, vice president of real estate for CCDC, said her agency is interested in working with Concordia but doesn't yet know enough about what the developer has planned for the site to say for sure what kind of subsidy CCDC could offer. "We want to do what's right for the community and what's good for the Housing Commission's ability to move to Smart Corner."
At press time Tuesday, Royal said CCDC and the Housing Commission had met at Madaffer's request and were working on scenarios that would allow CCDC to purchase the property.
Bobbie Christensen, spokesperson for the Housing Commission, said that the Housing Authority-essentially the city-would be on the hook for $6 million if the deal with Concordia falls through and CCDC can't come up with the funds to buy the property. That money is due to Lankford and Associates, the Smart Corner developer, on or before November 2006-which seems like a good amount of time, just not in terms of the request-for-proposal process the Housing Commission would have to go through if faced with the prospect of looking for another buyer. That alone could take seven months, Christensen said."It's not as easy as getting an offer and selling your house," she noted.