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Board approves $15M tax-exempt bond allocation and air-rights lease for Transbay Block 6 affordable housing
Summary
The Board authorized MOHCD to issue up to $15 million in tax-exempt bonds and approved a long-term air-rights lease to develop 70 affordable housing units at Transbay Block 6, to be built by Mercy Housing California. The board also accepted related developer payments that will be applied as gap subsidy for Block 6 and Block 7.
The Board of Supervisors on May 6 approved resolutions authorizing the issuance of approximately $15 million in tax-exempt conduit bonds to finance construction of a 70-unit affordable family housing development at Transbay Block 6 and approved a long-term air-rights lease for the parcel to Mercy Housing California.
Supervisor Kim described the project as a key component of the larger Transbay redevelopment and noted the city's requirement—under state law—for 35 percent of new Transbay-area housing to be affordable. She said Block 6 is a mid-rise building sharing a podium with a market-rate tower under construction; Block 6 will include 55 one-bedroom units, 14 two-bedroom units, and one manager's unit targeted to households earning no more than 50 percent of area median income (AMI). The staff presentation recorded the bond allocation award from the California Debt Limit Allocation Committee and noted the project's construction schedule: ground-breaking in the weeks after the meeting and completion projected in mid-2015.
Elizabeth Colomello of the Office of Community Investment and Infrastructure (OCII) explained project financing: developer Golub & Company will pay a fee of $24.3 million to OCII; $14 million of that fee will be applied as gap subsidy for the Mercy Housing Block 6 project and the remainder will help fund the adjacent Block 7 affordable project. The air-rights parcel will be owned by OCII during construction and will transfer to the Mayor’s Office of Housing and Community Development (MOHCD) following redevelopment-agency successor requirements. The board was also told the project will be subject to the Transbay redevelopment plan and statutory successor-agency procedures.
The board voted on the related bond-inducement and air-rights lease resolutions together. Roll call produced 11 ayes; the clerk announced the measures adopted. Staff present included Mercy Housing representative Sheila Jeevan and deputy MOHCD staff; they answered supervisors’ procedural questions and confirmed programmatic details, including targeted AMI level and unit mix.
The action enables Mercy Housing to move forward under the public-private development framework for the Transbay plan area. The transaction uses a combination of developer fees and tax-exempt bond financing to fill a financing gap and move affordable units into construction alongside market-rate development in the rapidly redeveloping Transbay neighborhood.
