Affordable housing targeted for downtown
Developer buys parcels needed for the proposed Gateway Tower project
SAN JOSE >> An affordable housing tower may sprout in downtown San Jose after a developer bought sites needed for the project, a real estate deal buoyed by a big funding boost from a local government entity.
The Core Cos., a local developer that acted through an affiliate, has paid $18.2 million for three parcels near the corner of South Market Street and East William Street, documents filed on April 15 with the Santa Clara County Recorder's Office show.
The affiliate also landed $18.2 million in financing from Santa Clara County to purchase the sites, according to the property records. The county documents stated that the county financing was a property purchase loan.
The property purchases represent a major early step for the development of 300 affordable homes at 470 S. Market St. in a project known as Gateway Tower.
“Gateway Tower will be the first of its kind in the South Bay: a 100% affordable tower providing critically needed homes targeting a broad spectrum of income levels,” the development firm stated in a prepared release sent to this news organization this past Monday.
“The Core Cos. is thrilled to deliver another affordable housing project in Santa Clara County,” said Chris Neale, president of the real estate firm.
In follow-up construction financing, Santa Clara County will provide a $64 million loan to help build the new tower, Core Cos. stated.
The $64 million in future financing from the county will be provided by funding arising from the 2016 Measure A Affordable Housing Bond, Core Cos. said.
For the tower to actually begin and complete construction, however, additional funding will be required beyond what the county has provided and intends to provide, Neale said.
“Core Cos. will work to secure necessary permits and the remainder of the financing with tax credits and bonds through the state of California,” the company said.
The company has completed or has launched the development of a number of projects in the Bay Area, primarily in the South Bay.
One high-profile project is Agrihood in Santa Clara, an affordable residential development with a working farm on site. Agrihood consists of 361 residences. Of those, 181 homes will be offered at below-market rates. Of the 181 affordable homes, 165 will be set aside for seniors.
The Gateway Tower residences downtown will be made available to people who earn as little as 30% of the area median income up to those who earn 120% of the area median income, or AMI, for the region. In 2021, the AMI for Santa Clara County for a family of four was $151,300 a year.
The project will feature several amenities, including a gym, community room, garden and on-property resident services.