Financial Affairs

Google loan and real estate purchase bolster affordable housing in San Jose – East Bay Times

SAN JOSE – An affordable housing project in San Jose has come close to reality with a new loan and the purchase by the developer of the properties where the houses will be built.

Station Kelsey Ayer has secured additional funding from Google and the developer of the project has just finalized the purchase of the properties needed to develop 115 units, according to public documents filed in Santa Clara County on Jan.15.

“Google has allowed us to accelerate our development plans and continue this project,” said Micaela Connery, Founder and CEO of The Kelsey, co-developer of The Kelsey Ayer Station.

Acting through an affiliate, The Kelsey paid just over $ 3 million to buy four plots on North First Street near Fox Avenue on the northern outskirts of downtown San Jose, according to property records.

Google Endeavor, a unit of Alphabet, which owns search giant Google, has finalized a financial package for the project’s pre-development stages, according to county documents.

“With the fallout from COVID-19 exacerbating the housing crisis, we are investing more in the Kelsey Ayer station to bring it closer to the next phase of development,” said Michael Appel, spokesperson for Google. “We look forward to the start of construction this summer as the project progresses. “

The new development is designed to be fully accessible to anyone with a physical, sensory or intellectual disability, according to Connery. Google Endeavor provided $ 6.9 million in funding.

“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 often overlooked in the affordable housing conversation: adults with disabilities. intellectual and others, ”said Appel.

The $ 6.9 million funding 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 registered. January 15th.

“I give Google a lot of credit for finding funding early on in the project when there was still a lot of unknowns about Kelsey Ayer Station,” Connery said.

The next big step: getting state and federal tax credits that will complete the initial phase of project funding.

Once the tax credits are obtained, it should be possible to secure the funding to actually build the Kelsey Ayer station. Connery estimates construction should begin around June or July.

Julie Mahowald, CFO of Housing Trust Silicon Valley, believes that Google’s interest and involvement in the project was crucial to the success of the development. Housing Trust operates a fund that invests in affordable housing in the Bay Area, including loans provided by Google Endeavor.

“Google has taken the time to understand this project and how creative it is,” said Mahowald.

Kelsey Ayer station will offer a mix of two-bedroom studios and apartments. It is developed with units which are affordable for people with a wide range of income.

“The building will be affordable for the entire range from extremely low to moderate incomes,” Connery said.

Based on the median income for the Santa Clara County area, it is possible that units will be rented out to people with annual salaries ranging from $ 33,150 to $ 78,850.

About 30% of units will be offered for less than $ 500 per month.

“We are seeing that Google is committed to developing as much affordable housing as possible in San José and other cities in the Bay Area,” said Mahowald.