In November 2023, Chelsea Investment Corp. (Chelsea) broke ground on a $150 million affordable housing tower in the East Village of Downtown San Diego. Previously known as the 13th & Broadway project, Harrington Heights will be a 15-story building that will include 270-unit affordable rental apartments; all the units will be affordable to Extremely Low-, Very Low-, and Low-Income households and subject to long-term income and affordability covenants for 55 years.
The project’s tenants will include formerly homeless individuals, veterans and those with developmental disabilities and veterans. Social services and case management will be provided by Alpha Project. While the unit sizes have a smaller range, notable about the project is its large amount of outdoor terrace space, including a top floor deck with views of Downtown. The project will be located one block east of the San Diego Metropolitan Transit System (MTS) City College trolley station.
KMA has served as the City of San Diego’s (City’s) economic consultant throughout the predevelopment process and is excited to see the project under construction. The City provided the land on a long-term ground lease, and a $10 million contribution to the project. Additionally, the San Diego Housing Commission provided an $8,000,000 capital loan to the project.
In February 2019, the City entered into a DDA and ground lease with the developer. The complicated transaction involved a land swap that will enable Chelsea to build affordable housing on one site and the City to develop the East Village Fire Station on the other site.
KMA prepared a Section 33433 Summary Report outlining the transaction terms and the value of the interest conveyed to Chelsea by the City. The project financing went through many iterations in response to changing financial conditions and funding availability from 2019 through 2023. The ultimate financing plan included: 4% Low Income Housing Tax Credits (LIHTCs), a tax-exempt bond, State Tax Credits, a loan from the City of San Diego, a loan from the San Diego Housing Commission, a Multifamily Housing Program (MHP) loan, an Affordable Housing and Sustainable Communities (AHSC) loan, a California Reducing Disparities Project (CRDP) loan, and an Infill Infrastructure Grant (IIG).
