Google loan, purchase bolster affordable homes
SAN JOSE >> An affordable housing project in San Jose has moved closer to reality with a new loan and the developer’s purchase of the properties where the homes will be built.
The Kelsey Ayer Station has landed more financing from Google and the project’s developer has just completed a purchase of the properties needed for the 115-unit development, according to public documents filed in Santa Clara County on Jan. 15.
“Google has allowed us to accelerate our development plans and keep this project going,” said Micaela Connery, founder and chief executive officer of The Kelsey, a co-developer of The Kelsey Ayer Station.
Acting through an affiliate, The Kelsey paid just over $3 million to purchase four parcels on North First Street near Fox Avenue on the north edge of downtown San Jose, the property records show.
Google Endeavor, a unit of Alphabet, the owner of search giant Google, completed a financing package for the pre-development stages of the project, county documents show.
“With the fallout from COVID-19 worsening the housing crisis, we’re investing more in The Kelsey Ayer Station to bring it closer to the next phase of development,” said Michael Appel, a spokesperson for Google. “We’re looking forward to construction beginning this summer as the project moves forward.”
The new development is designed to be fully accessible for anyone with physical, sensory, or intellectual disabilities,
according to Connery. Google Endeavor has provided $6.9 million in financing.
“When we made our first investment in 2019, we did so to help create more affordable housing in San Jose and an inclusive community for those who are often overlooked in the affordable housing conversation: adults with developmental and other disabilities,” Appel
said.
The $6.9 million in financing consists of $5.3 million in the very early stages of the project, in 2019, and $1.3 million in the most recent loan, which was recorded on Jan. 15.
“I give Google a lot of credit for coming up with funding early in the project when there were still a lot of unknowns about Kelsey Ayer Station,” Connery said.
The next major step: to land state and federal tax credits that will complete the initial stage of the financing of the project.
Once the tax credits are obtained, it should be possible to land the financing to actually build The Kelsey Ayer Station. Connery estimated construction should begin somewhere around June or July.
Julie Mahowald, chief financial officer with Housing Trust Silicon Valley, believes that Google’s interest and involvement in the project have been crucial to the development’s success. Housing Trust manages a fund that invests in affordable homes in the Bay Area, including loans provided by Google Endeavor.
“Google took the time to understand this project and how creative it is,” Mahowald said.
The Kelsey Ayer Station will offer a mix of two-bedroom and apartment studios. It is being developed with units that are affordable to people with a wide range of incomes.
“The building is going to be affordable across the range of extremely low income to moderate income,” Connery said.
Based on the area median income for Santa Clara County, it’s possible that the units would be rented to people with annual wages ranging from $33,150 to $78,850.
About 30% of the units will be offered for less than $500 a month.
“We are seeing that Google is committed to the development of as many affordable homes as possible in San Jose and other cities in the Bay Area,” Mahowald said.