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Council approves sale of 1401 Imperial to Father Joe’s for 164 units of 100% affordable housing
Summary
The City Council unanimously authorized sale of the city‑owned former iFLY/navigation center at 1401 Imperial Ave to Father Joe’s Villages; the developer will adaptively reuse four stories and add 14 new stories to deliver 164 deeply affordable units reserved at roughly 30–60% AMI, with a $5.0M cash payment at close and a $2.9M residual‑receipts loan from the city.
The San Diego City Council voted unanimously on May 20 to declare 1401 Imperial Avenue exempt surplus land and to authorize a disposition and development agreement (DDA) with Father Joe’s Villages to redevelop the property into 164 units of 100% affordable housing.
Economic Development Department program manager Mark Frederick told the council the city acquired the downtown property in January 2018 with CDBG funds and had operated a homelessness response/navigation center there but moved to maximize the site’s development potential for affordable housing. Tyler Garland outlined the developer proposal: adaptive reuse of the existing four‑story structure for common areas and supportive services plus 14 new residential stories that will provide 108 studios, 54 one‑bedrooms and two two‑bedrooms, with two on‑site manager units. The project reserves units for households at about 30–60% of area median income.
Key deal terms presented to council included an appraised sale price of $7.9 million, a $5.0 million cash payment to the city at close of escrow and a $2.9 million residual receipts loan amortized over 55 years at an interest rate of 4%. The escrow period will allow for physical due diligence, permitting and financing approvals (maximum escrow length: three years); staff noted Father Joe’s expected to apply for financing in the current round and, if successful, could start construction before 2026, with estimated completion 24–30 months after ground‑breaking.
Council members and public commenters offered strong support for converting a difficult‑to‑use former iFLY facility into deep affordability, while some advocates urged staff to include project‑level Affirmatively Furthering Fair Housing (AFFH) analysis and to consider local economic investment and anti‑displacement measures. Several councilmembers asked staff to include AFFH analysis in future disposition staff reports; Economic Development staff agreed to add that material going forward.
Father Joe’s representative Jody Rothery said the organization would pay prevailing wages for the project and is working with a union‑based general contractor; Father Joe’s also described plans to pursue agreements for local hiring and Section 3‑style opportunities for low‑income residents. The council approved the staff recommendations and authorized the mayor or designee to sign the DDA and the CFO to accept and deposit sale proceeds into the city’s Community Development Block Grant fund.
