Reven Capital, a real estate firm based in La Jolla, has put forward a proposal to convert the troubled office building at 101 Ash St. into nearly 400 units of affordable housing. The proposal is in response to the city’s call for ideas on how to reimagine five blocks of public land in downtown San Diego’s Civic Core. Reven Capital’s proposal was the only one that met the city’s criteria.
CEO Chad Carpenter of Reven Capital expressed his interest in converting the office building into housing due to the surplus of office space in downtown San Diego and the pressing need for affordable housing in the area. Carpenter mentioned that the building’s rectangular shape would lend itself well to an office-to-housing conversion.
To explore potential floor plans for studios and one- and two-bedroom apartments, Carpenter collaborated with the architecture firm Gensler. The proposal aims to address the housing crisis in downtown San Diego by utilizing the city’s downtown land holdings.
The 101 Ash St. building has become notorious in San Diego due to political scandals and poor real estate deals. The city had overpaid for the property by tens of millions of dollars in 2016, and renovations were poorly executed. It was later discovered that the city’s real estate broker had also been working for the building’s seller.
Now, the city will enter a 90-day negotiating period with Reven Capital to reach a deal that can obtain approval from the City Council. Mayor Todd Gloria’s office emphasized that these negotiations are crucial for achieving his goal of utilizing the city’s downtown land holdings to address the housing crisis. Gloria plans to use the City Operations Building to build a new City Hall and aims to sell or lease the five other adjacent city-owned properties to help fund it.
The Surplus Land Act requires the city to prioritize affordable housing when leasing or selling its real estate. Since the city received no responsive bids for the remaining properties, it has the option to lower the affordable housing requirements to attract more bidders.
Stephen Russell, the executive director of the nonprofit San Diego Housing Federation, expressed excitement about the potential preservation of 101 Ash St. due to its architectural significance and the environmental benefits of repurposing an existing high-rise building for housing. He praised the building’s dignified facade and its representation of a particular era in San Diego’s history.
While the trend of office-to-housing conversions has grown recently due to remote working, Russell highlighted that the costs associated with plumbing, HVAC, electrical, elevator systems, and asbestos removal can sometimes make such projects financially challenging.
During the negotiations, key factors to be resolved include whether the city would sell or lease the property to Reven Capital and at what cost. The city might offer the firm a discount to compete for affordable housing tax credits, but this would conflict with the city’s plan to finance a new city hall using the property.
Sources:
– La Jolla Light: “Reven Capital offers to convert 101 Ash St. office tower downtown into affordable housing” (www.lajollalight.com/news/story/2021-07-15/reven-capital-offers-to-convert-101-ash-st-office-tower-downtown-into-affordable-housing)
– NBC San Diego: “La Jolla-Based Firm Proposes Converting 101 Ash Street into Affordable Housing” (www.nbcsandiego.com/news/local/la-jolla-based-firm-proposes-converting-101-ash-street-into-affordable-housing/2648990/)