Council to consider $267 million affordable housing project at troubled high-rise

• The transaction has been the subject of years of lawsuits and resulted in a guilty plea over conflict-of-interest charges against the city's former real estate advisor.

State of play: The City Council on Tuesday will decide whether to lease the long-dormant office tower to developers proposing to retrofit it into 247 apartments reserved for low-income residents.

• The estimated $267.6 million cost — more than $1 million per unit — would be mostly funded through state and federal grants.

Flashback: The city settled lawsuits against the landlord and lender of 101 Ash Street and Civic Center Plaza, a nearby high-rise, in 2022.

• As part of that settlement, the city bought itself out of the leases on those two buildings, acquiring them outright for a combined $132 million.
• Mayor Todd Gloria then combined them into a planned redevelopment of the Civic Center area, which failed to attract developer interest.

• The city's attempt to revive the Civic Center is trudging along.

Between the lines: The project would be San Diego's most significant office-to-apartment conversion yet, as the city continues to grapple with the post-pandemic collapse in demand for office space.

A review by the city's Independent Budget Analyst's office concluded the proposal "appears financially and economically feasible and that it provides a clear public benefit in providing needed affordable housing."