What: First amendment to the ground lease disposition agreement for the city-owned property at 107 Ash Street (formerly 101 Ash Street), a vacant 21-story downtown office building to be converted into affordable housing with commercial and child care space while the City keeps the land.
Where it stands: Council approved the amendment and related actions 8-0 on September 15 (one Council Member absent). The original agreement was approved in July 2025 and executed in August 2025; financing came together about a year ahead of the two-year window, and the amendment moves the deal toward financial closing.
Item 331. Staff said changes since 2025 reflect lender and tax credit investor requirements: ground lease 60 to 65 years, affordability term 55 to 65 years, units 250 to 252 (249 affordable plus 3 manager units, serving households from 30 to 80 percent of area median income, 60 percent average), and the City's $45.6 million note improving from 4 percent simple interest to 5 percent compounding annually. The City keeps fee ownership, ground rent with annual increases, residual receipts and 2 percent of gross proceeds of qualifying capital events; the developer bears development and asbestos-related costs. Actions also included economic opportunity findings, a CEQA exemption and deposit of future residual receipts to the general fund.
Public comment: e-comments 0 in favor, 1 opposed. One in-person speaker welcomed the progress; several others and remote callers questioned whether a building condition report supports a lease to 2091, developer fees, asbestos mitigation and a conflict-of-interest allegation involving a city official; Council Members answered that the adaptive reuse extends the building's life and that these questions were addressed in earlier approvals.
Motion to approve the staff recommendation, seconded; passed 8-0. Council Members asked that the City hold the parties accountable through construction.