Builder sought for affordable units on City Hall site

Builder sought for affordable units on City Hall site
To comply with a state requirement, Solana Beach is issuing a request for proposals to potentially build an affordable housing complex in the City Hall parking lot, although whether the site is viable for such units remains to be seen. Photo by Bianca Kaplanek

SOLANA BEACH — To fulfill a requirement of the city’s state-certified housing element, council members at the March 14 meeting voted 3-1 to release a request for proposals for affordable housing that may or may not be built on the City Hall property.

“The state has declared that there is, in fact, an affordable housing shortage in the entire state,” City Attorney Johanna Canlas said. “More and more state mandates are being pushed through local government to make and find ways to actually create affordable housing.

“With that policy direction from Sacramento, all local agencies … are being told to explore properties that are within the control of the city to actually create new units,” she added. “So that’s what we are doing.

“You’re not approving a project,” Canlas said. “You are not approving a developer. This is just releasing the request for proposals to see if affordable units can be built at this site.”

“There’s no doubt that there’s a housing shortage of affordable and unaffordable housing in San Diego County,” said Mayor Ginger Marshall, who cast the dissenting vote. “I just don’t like state government shoving this down our throats.”

The 1.3-acre City Hall site has been identified as one of three city-owned parcels that are viable for affordable housing.

A mixed-use complex, with residential units priced at the low- and very-low income level, is proposed, with the City Hall building retained — although it doesn’t have to be.

Councilwoman Jewel Edson said tearing down an existing building can sometimes be easier than a remodel. Council members Dave Zito and Judy Hegenauer agreed, saying they like the idea of being flexible with the existing structure.

“But I don’t want it to be that we put out there like it’s something that we would necessarily be paying for,” Zito said. “People can get creative but don’t expect us to come up with $16 million to rebuild City Hall like Del Mar.”

“I don’t like that idea either,” Marshall said.

The complex would be built in the existing surface parking lot and include an added parking structure. The site has the potential for 14 units but since affordable housing projects usually qualify for a density bonus, up to 19 could be built.

According to the staff report, some rent revenue is expected to go to the city, although the units would be built, managed, maintained and operated by the developer. Buildings will be no more than two stories high and meet or exceed zero net energy standards.

The other two city-owned sites identified as viable for affordable housing are the distillery lot at 140 S. Sierra Ave. and a parking lot at 500 S. Sierra, which has been approved for 10 very-low-income units.

That project, known as The Pearl, has been in the works since 2009, when developer Ginger Hitzke submitted an unsolicited proposal to Solana Beach for a mixed-use affordable housing development.

Solana Beach was subject to lawsuits since the 1990s after City Council took action that closed a mobile home park.

Affordable housing advocates threatened litigation, claiming low-income units were eliminated. Rather than go to trial, the city entered into what became known as the Pearl settlement that, among other things, mandated the replacement of 13 affordable units.

Since then three have been provided. The Pearl’s 10 units will satisfy that legal requirement. Financing for the project was scheduled for discussion at the March 28 meeting.

Residents along South Sierra suggested during the many contentious public hearings eight years ago that the City Hall property be used for Hitzke’s complex.

Canlas said the site was evaluated for 10 units but the parcel was not “financially feasible based on that proposal.”

“That was a different housing element,” she said. “We’re now in a different cycle.”

“It was a very specific project with very specific requirements,” Zito added.

He and City Manager Greg Wade said the City Hall site may still not be a viable option for affordable housing but the city is mandated to release the RFP, which was supposed to be issued last year.

“We’re a little behind schedule,” Wade said, adding that “the economics of developing affordable housing today … are difficult at best.”

“Most projects are looking for free land and a pretty huge subsidy,” he said. “So, we’ll see what happens. We’re just trying to comply with … housing law.”

“Construction prices are really high right now,” Zito said. “The market is different. I do think it’s going to be challenging. But it’s our responsibility to put this out there.

“We want to make sure that we’re showing good progress against what we actually have agreed to in our current housing element, which does stipulate that we have to issue an RFP for this property,” he added.

Zito also noted that if the city doesn’t comply with state requirements, it could lose grant funding, as is currently the case in Encinitas.

Marshall said she’s heard “a lot of negativity and opposition” to building a second affordable housing complex on South Sierra.

“We already have one affordable housing project going in,” she said. “I don’t like to see these concentrated around the city. There’s some other sites that I would think would be better — the train station, the Solana Highlands redevelopment of those apartments.”

Wade said those properties have been identified for affordable units.

“It’s our responsibility to put the projects where we can,” Zito said. “We have limited land and we’ve got to make use of what we have and these projects can be nice if they’re done correctly.”

“Sometimes we have to do things that are not, perhaps, what we want to do but what we’re required to do,” Edson said. “And in this case, we are required by the state to act.”

According to the timeline in the staff report, the RFP submittal deadline is June 4, with a developer selection scheduled for Sept. 12. 

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