Modesto teams up with developer on $56.7M affordable housing project in downtown. Here’s why
Modesto and an affordable housing developer will seek $50 million from the state for an approximately 160,000-square-foot, six-story apartment building in downtown, as well as transportation improvements that provide the tenants and the public with alternatives to driving.
The City Council on Tuesday approved applying with Stockton-based Visionary Home Builders of California for $50 million from California’s Affordable Housing and Sustainability Program.
If awarded the state funding, the project would be the first major housing development in downtown in more than a half dozen years and only the second in about 50 years. The previous two were affordable housing for seniors.
Council members were enthusiastic about the possibility of this development becoming a reality.
“I’m just very excited about this project,” Councilman Chris Ricci said. “Thank you, Visionary, for giving us the opportunity to work with you.”
Modesto’s future depends on projects like this that provide affordable housing with ready access to public transportation, Ricci said.
Councilman Nick Bavaro said based on his research, Visionary has a great reputation and he looks forward to Modesto entering into more partnerships with the nonprofit developer.
Visionary has been building affordable housing for 40 years. Its communities include Almond Terrace in Ceres and Oak Haven Senior Apartments and Oak Leaf Meadows in Oakdale.
The Affordable Housing and Sustainability Program funds housing that is close to bus routes, bike lanes, rail and sidewalks (and pays for that infrastructure as well) and is near jobs and amenities. The goal is to reduce greenhouse gas emissions by making people less reliant on cars.
Awards announced in August
The program has $750 million in its latest funding round, and the state expects to announce in August which projects it will fund.
The Modesto development is called the Seventh Street Village and would be built on Seventh Street between I and J streets. The project is next to the Old St. Stanislaus Catholic Church and near the heart of downtown. The front of the building faces west along Seventh Street.
The project consists of 79 one-, two- and three-bedroom apartments. The ground level would have 5,000 square feet for a Head Start program, community center and leasing office. The developer hopes to land a small grocery selling meat and produce in an additional 5,000 square feet on the ground level. Parking would be on the ground level and second floor.
Visionary CEO Carol Ornelas has said the building could provide housing for 300 people. It is for households that make 30% to 80% of what is called the area median income. As an example, that ranges from $23,910 for a family of four at 30% to $63,760 at 80% of the area median income.
Rents are subsidized to make them affordable. Ornelas has said this is workforce housing because the majority of households will have members who are employed.
The $50 million breaks down into a $15 million grant to Modesto and a $35 million loan to Visionary.
Modesto would spend $9 million on downtown infrastructure, including sidewalks and bike lanes with shade trees and an upgrade of the bus route that passes by the project. The bike lanes would be part of a proposed bike lane network connecting downtown with the Virginia Corridor Trailway, the paved, tree-lined path popular with runners, walkers and cyclists.
The city also would spend $6 million to provide the Altamont Corridor Express with a zero-emission locomotive to replace an older one. ACE is expected to bring Bay Area commuter trains in 2026 to the downtown Transit Center, which is two-tenths of a mile from the proposed Seventh Street Village.
City sets aside $7 million
The City Council on Tuesday also approved setting aside $7 million of the city’s federal and state affordable housing funding for the project and deferring nearly $1 million the project would owe in capital facility fees (which mitigate the impacts of new development).
The council vote was 6-0, with Councilman Jeremiah Williams not taking part in the vote or discussion because he owns property near the proposed Seventh Street Village.
A city report estimates the cost of building Seventh Street Village at $56.7 million. Besides the $7 million from the city and $35 million from the state, Visionary would seek tax credits and other financing for the project. Construction could start as soon as spring 2024 and take 18 to 24 months if the project secures all its funding.
Visionary is under contract with the owners of the four parcels it needs for the project. One parcel would be set aside as a retention pond with the goal of eventually building more affordable housing. The project totals nearly nine-tenths of an acre.
Ornelas has said two parcels are vacant, one has a closed auto body shop and the fourth has a triplex with two families living in it. These families would be provided with relocation benefits or the option of living at Seventh Street Village.
This story was originally published March 15, 2023 at 11:38 AM.
