San Diego Moves Forward on Downtown Affordable Housing
Chelsea tapped to redo city-owned block that had been slated for Ritz-Carlton.
A city-owned site in downtown San Diego that had previously been designated for a Ritz-Carlton hotel is now planned to become a 100% affordable multifamily campus.
San Diego’s Economic Development Department is entering into exclusive negotiations with Carlsbad, CA-based Chelsea Investment Corp. to redevelop a publicly owned block at Seventh Avenue and Market Street for lower-income housing.
According to a project proposal released last week, all of the 402 units in the development will be reserved to households earning from 30% to 80% of area median income in San Diego County, which is $119,500 for a family of four, according to a report in the San Diego Union-Tribune.
Chelsea is planning a three-phase project that would independently finance and construct three eight-story apartment buildings on the site, which currently is occupied by a parking lot. The buildings would include underground parking and community rooms with computer labs, the report said.
“Chelsea’s vision is to transform the Seventh and Market site into a vibrant and high-quality inter-generational affordable housing community…by providing the most units of high-quality affordable housing in an efficient time frame,” the developer said in its project proposal.
In February 2023, the city formally terminated a 2016 agreement with a development team led by San Diego-based Cisterra to build a $700M project at Seventh and Market that would have included San Diego’s first Ritz-Carlton hotel.
To facilitate the multifamily redevelopment, the city designated the site as surplus land that is no longer required for municipal use and is therefore subject to the state’s Surplus Land Act, which is a form of eminent domain.
The Surplus Land Act requires the city to distribute a notice of availability to affordable housing builders registered with the state who then have 60 days to respond with interest.
The city is required to engage in a 90-day negotiation period with the respondents and give what is known as first priority to the bidder proposing the highest number of affordable housing units—those that are deed-restricted for families making 80 percent or less of the area median income.
Four developers bid on the parcel at Seventh and Market. As the bidder proposing the highest number of affordable units, Chelsea will be given 180 days to firm up its development and financing plans and conduct due diligence on the East Village site, the newspaper report said.