101 Ash St. developer awarded federal subsidies for low-income housing project

The development team promising to transform the city of San Diego’s asbestos-ridden office tower at 101 Ash St. into apartments for low-income families has secured a substantial portion of the federal subsidies required to complete the conversion project.

Last week, the California Debt Limit Allocation Committee awarded the 101 Ash St. project a $63.8 million allocation of tax-exempt bonds. The award means that the 101 Ash Venture LP development entity, which consists of housing developers MRK Partners and Create Dev LLC, is also entitled to $82.2 million in tax credit equity — or $9.6 million in federal low-income housing tax credits doled out annually to project investors, at 86 cents on the dollar, for 10 years.

With the award, the 101 Ash St. developers now expect to close escrow on a long-term ground lease and redevelopment deal with the city before the end of June, and start construction shortly thereafter.

“We’re ahead of schedule, and we’re doing exactly what we said we were going to do,” said Synde Garchik. “We’re on our path to closing and we’ll do that in the first half of next year. So we’re thrilled. … This is going to be a standout project for the city.”

The bond award comes four months after the city approved a 60-year lease agreement and associated contracts with 101 Ash Venture LP, which gave the developer a two-year window to secure the federal tax credits needed to fund what is currently estimated as a $252 million project. Th...