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Council approves Mercado Apartments loan amendments to preserve and add affordable units in Barrio Logan
Summary
Council approved amendments to the existing 1994 loan documents for Mercado Apartments to permit substantial rehab of 132 units and construction of 92 new units at 35–60% AMI, extend affordability covenants for 55 years, and proceed with tax‑credit financing.
The City Council on Sept. 8 approved staff recommendations to amend and assume loan documents tied to the Mercado Apartments (Barrio Logan), enabling a substantial rehabilitation of 132 existing units and construction of a new 92‑unit building, for a total of 224 affordable units serving households at roughly 35–60% of AMI.
Michael Wong, program manager for the successor agency, outlined the project’s scope, relocation support and financing plan. The action keeps the city's existing loan in place, updates definitions and provisions to current industry standards (operating expenses, permitted transfers, foreclosure/residual receipts), and extends affordability covenants for 55 years after completion. A relocation budget of roughly $2.3 million was described to support households during renovation.
Staff said MAC (Metropolitan Area Advisory Committee on Anti‑Poverty) will apply for tax credits on Sept. 9, 2025; if awarded, construction could begin in 2026 and last about 26 months. The council’s approval preserves existing affordable units and adds new ones, and members described preservation as a high priority for the city.
Public comment included concerns that the project targets 35–60% AMI rather than extremely low‑income households and that SPA supporting documents should include prior community planning group letters. Councilmembers emphasized preservation benefits and approved the item by voice vote (final tally recorded as unanimous with one absent).
