April 19, 2024
A big affordable housing project in San Jose is pushing ahead with a property purchase and a key construction financing package.

SAN JOSE — A big affordable housing project in San Jose is pushing ahead with a property purchase and the landing of a crucial money package for the construction of the residences, public documents show.

The affordable residences are part of Stevens Creek Promenade in San Jose, a big mixed-use development that will feature housing, retail and a hotel.

Pacific West Builders, acting through an affiliate, has paid roughly $3.5 million for the site where the affordable homes would be built, according to documents filed on Feb. 21 with the Santa Clara County Recorder’s Office.

Miramar Capital Group, which is the primary developer of the Stevens Creek Promenade complex, sold the site for the affordable housing portion of the project to Idaho-based Pacific West Builders.

In 2020, Santa Monica-based Miramar Capital Group and Machine Investment, acting through affiliate MPG Stevens Creek Owner, paid $54.5 million for the overall development site, including the just-sold affordable homes parcel. The overall development property is located on the south side of Stevens Creek Boulevard between Kiely Boulevard and Palace Road.

The California Housing Financing Agency authorized the issuance of a bond package to enable construction financing for the affordable housing project, according to a staff report prepared for a recent meeting during which the state agency approved bonds and funding for the project.

The affordable residential development would consist of 173 homes. Of these, 171 will be affordable apartments that will be rented to residents belonging to households making 30% to 70% of the area’s median income, according to the state housing agency’s report. Two of the units will be market-rate homes for on-site managers.

The Santa Clara County area median income in 2023 was $181,300 for a four-person household. That would mean the income limits for the affordable homes in this project would range from about $54,390 a year to $126,910.

The total construction package is valued at $125.6 million, according to the agenda materials for the state Housing Finance Agency.

Of that overall amount, Citibank is providing the project with $98.6 million in construction financing through two separate loans. Bonneville Multifamily Capital is providing a third loan of $10 million, according to the California Housing Finance Agency documents.

The 173-unit project will include 44 studio units of 422 square feet each, 37 one-bedroom units ranging in size from 563 to 573 square feet, 45 two-bedroom units of 776 square feet and 47 three-bedroom units of 1,064 square feet. Two of the three-bedroom units will be manager’s homes.

“This is an inclusionary project and will be part of a larger development that will include two market-rate apartment buildings and a 250-room hotel,” the state housing agency documents state.

One of the market-rate apartments will be 191 units and the other will be 216 units.

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The market-rate apartments as well as the hotel are expected to be built at some point after the affordable housing is built, or at least under construction. The project is being built in phases in a way to enable the affordable homes to be developed first.

This project is located at 4300 Stevens Creek Boulevard, a short distance from San Jose’s two mega malls, Westfield Valley Fair and Santana Row.

Construction of the affordable apartments is slated to begin within weeks and should take roughly two years to complete and potentially open in 2026, the state agency documents show.

When originally conceived, Stevens Creek Promenade was expected to feature 233,000 to 300,000 square feet of office space, up to 582 apartment units and as much as 22,000 square feet of retail and restaurant space on the ground floor.

In the latest version, the retail component has been trimmed to 10,800 square feet. The developers have scrapped the office component completely in an uncertain market for that type of product as well as fast-rising office vacancies.

 

 

 

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