The San Diego City Council has approved amendments to the ground lease for the long-vacant building at 107 Ash Street, clearing another hurdle for a project that would bring approximately 250 income-restricted affordable homes to downtown San Diego.

The Council approved the amendments on Sept. 15, extending the ground lease from 60 to 65 years to support the project's tax credit financing structure. The City will retain ownership of the property throughout the lease and will accrue interest on the building's value at 5 percent annually, while receiving ground rent and other payments.

"After years of sitting vacant, 107 Ash is finally moving toward a new future, one that delivers more homes, deeper affordability, and long-term value for the City," said Economic Development Department Director Christina Bibler.

The development, led by 101 Ash Venture LP, will offer studio, one-, two-, and three-bedroom units for households earning between 30 and 80 percent of the area median income. Under the agreement, the developer is responsible for all costs associated with redevelopment — including environmental requirements, design, entitlements, construction, maintenance, and operations — and the City will receive the fully improved building at the end of the 65-year term.

The property, formerly addressed as 101 Ash and now officially 107 Ash, will also include approximately 25,000 square feet of commercial space and a 4,000-square-foot childcare center for children ages 0 to 5.

With financing not yet closed, the development team is now working to finalize its funding package ahead of construction.