San Diego closer to leasing 101 Ash Street building

The city of San Diego is now one step closer to offloading the $200-plus million civic calamity that is 101 Ash Street.

Today, July 2, a city council committee agreed to move a proposal from a development team to convert the long-vacant skyscraper into a 247-unit affordable housing project.

Of the 247 units, 25 will be allocated to those making 30 percent of the area median income, 38 will be set aside for those earning between 40 and 50 percent of the median income, and 184 units will be reserved for those making between 60 and 80 percent of the median income.

The development team - MRK Partners, an affordable housing developer with offices in Los Angeles and Boca Raton, Florida, and cReate Development, a firm owned and run by San Diego Planning Commissioner Kelly Modén - has agreed to pay $45.6 million over 60 years with the first payment not coming for another 15 years. The proposal hinges on receiving federal tax credits, which have yet to be obtained.

The city will retain ownership of the building throughout the lease term and will take possession of it upon expiration of the lease.

Meanwhile, the price tag for 101 Ash Street continues to rise. Every day, San Diego taxpayers shell out $6,575, totaling $2.55 million a year, to maintain the vacant downtown high-rise. That cost does not include expenses for outside attorneys who represent the city in a series of lawsuits related to the building, as well as for workers who sued after being exposed to asbestos during the city's massive remodel.

The daily price tag now puts the total price tag near $200 million for the building since the city entered into the lease-to-own agreement in 2016.

During today's Land Use and Housing Committee meeting, a representative from the Independent Budget Analyst called the deal "fiscally responsible" and stated that it would result in $2.55 million in annual savings in maintenance fees.

Not all, however, were in support. Former City Attorney Mike Aguirre said entering into a 60-year lease in an older building was out of the question. Aguirre said he plans to sue the city on behalf of a client over the proposed lease.

City councilmembers applauded progress on what Councilmember Kent Lee called a "dark chapter in San Diego's history."