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CalHFA approves $46.6M financing package for Sky Castle adaptive‑reuse project in Downtown Los Angeles
Summary
The California Housing Finance Agency board approved a $42.6 million first‑lien permanent loan and a $4.0 million subordinate MIP loan to support Sky Castle phase 1, converting the former LA World Trade Center into 241 mostly affordable units. The board approved Resolution 26‑20 by roll call.
The California Housing Finance Agency on July 23 approved permanent financing to convert the former LA World Trade Center into affordable housing, authorizing a $42,600,000 CalHFA first‑lien permanent loan and a $4,000,000 subordinate MIP loan for Sky Castle phase 1.
Catherine McFadden, CalHFA’s Director of Multifamily Programs, told the board the project will convert about 400,000 square feet of office and concourse space into housing without adding floors, with Phase 1 creating 241 units (239 affordable) targeting incomes between about 30% and 80% of area median income (AMI), and an average target near 60% AMI. McFadden said the capital stack includes tax‑exempt and taxable bonds, federal tax credits, a deferred developer fee of roughly $13 million and a seller carryback 3rd‑lien loan; Citibank is the construction lender and Raymond James is the equity investor. She reported a per‑unit cost of $443,000 and a per‑bedroom cost of $352,000 and noted a 15% hard‑cost contingency.
Garrett Lee, president of Jameson Properties and a co‑developer, said the parking structure is separately owned but currently has up to about 700 vacant stalls that can be leased to residents at discounted rates to support lease‑up. McFadden said the project has SHPO clearance and HUD NEPA authority was expected imminently, and recommended independent third‑party structural verification to address seismic and reuse complexities.
Board members asked about utilities, air‑space lot‑line adjustments to enable separate financing stacks, unit mix and family units. McFadden and the developer described a ministerial parcel/airspace process used to create independent financing stacks and explained that floor‑plate and CDLAC scoring considerations influenced the preponderance of one‑bedroom units in Phase 1.
Chair Cervantes called the vote on Resolution 26‑20; the board approved the loan by roll call. The approval clears the way for a construction start anticipated in late August (CDLAC closing deadline was noted as September 2) and a projected completion date in early 2029, subject to permitting and final financing steps.
