OCEANSIDE — A controversial mixed-use development project on the northeast corner of Seagaze Drive and North Nevada Street achieved its final step on Wednesday.
The City Council voted 4-1 to approve the financing plan, which includes a $65 million bond through the California Municipal Finance Authority for the eight-story project. However, the city is not responsible for paying back the bonds as those are the responsibility of the developer, Manhattan, Kan.-based Elsey Partners.
Mayor Esther Sanchez voted no on the project and ripped the process saying it was a bait-and-switch from its previous proposal. The developer applied and received $48.7 million from the California Affordable Housing and Sustainable Communities Grant Program in August 2024, which required the project be 100% affordable.
However, Sanchez, and another source, said the city was never notified of the grant application or change to a 100% affordable project. She said several reporters reached out for comment about the grant, but Sanchez said she had no idea what they were asking.
“This is a first, a single-residence occupancy in one building and no mix of family units does bother me a bit,” Sanchez added. “Apparently, that application went forward without any communications to the city. We were completely left out of the loop. I wish we could’ve had a better project.”
The mayor also railed against how the project is only studio apartments (all for rent) and range between about 282 to 300 square feet. When the project was entitled and approved in 2022, it proposed a mixed-use development with 64 hotel rooms, 115 studio apartments and 1,500 square feet of commercial space on the ground floor, according to city records. The new project will also have 1,500 square feet of commercial.
Also, Sanchez and some speakers questioned the lack of parking as the project will have 149 spaces with 45 racks and five storage lockers for bicycles, according to city records.
Project details
Elsey Partners filed a Senate Bill 330 application in 2023, which grants certain vested rights from city ordinances, policies and development impact fees.
In 2024, the project was amended to include 179 apartments with 18 reserved as affordable housing. The revisions amended the 64 hotel rooms into studio apartments, although the design and height remain unchanged, per city records.
There will be three levels of underground parking, the first story consists of the commercial space followed by two levels for parking and five stories of apartments. The third floor includes an outdoor pool, deck dining area and a gym, city records show.
Leilani Hines, Oceanside’s director of Housing and Neighborhood Services, said there will be 45 units for extremely low-income, 43 for very low and 89 for low.
As for parking, a city ordinance allows a 25% reduction of parking for projects within the Transit Oriented Development zone, which is within one-half mile of the Oceanside Transit Center. The project will have 132 spaces on site and seven street spaces for a total of 149.
Since the city did not have a maximum density policy for the Downtown District, the SB 330 application filed in August 2023 granted an increase of affordable units from 10 to 18. In addition, the project was not subject to the 86-dwelling unit per acre density cap enacted by the Community Development Commission in October 2023. The city approved its 15% inclusionary housing requirement in February 2024.
Since the project reserves 10% of the units for affordable housing, Elsey Partners is entitled to all benefits of the State Density Bonus Law, unlimited waivers and reduced parking.
One concession of the project will eliminate the requirement to underground overheard utilities along adjacent public streets.
The project was also granted eight waivers including setbacks, height, landscaping, open space, façade modulation, parking, ramp grades and garage drive aisle widths.
Transit, housing allocation
While Elsey Partners received a $48.7 grant, roughly $12.9 million will go to the North County Transit District and the balance to other service providers such as Interfaith Community Services, the San Diego Union-Tribune reported in August 2024. The grant program provides grants, loans or a combination of both to project integrating low-carbon transportation and affordable housing emphasizing disadvantage and low-income communities.
NCTD officials told the UT the funding will be used for drought tolerant landscaping, bus stops, drainage improvements, wayfinding and other improvements.
Oceanside was allocated 5,443 new units under the 6th Housing Element Cycle (2021-29) and distributed by the San Diego Association of Governments under the Regional Housing Needs Assessment. RHNA requires cities to plan and update zoning codes for additional units.
Oceanside’s allocation includes 1,268 for very low-income, 718 for low, 883 in the moderate category and 2,574 for above moderate. The city has the fifth-highest RHNA allocation in San Diego County behind the cities of San Diego, Chula Vista and Escondido and the unincorporated county.
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