Quick Take
As the city of Santa Cruz was raising funds for the Pacific Station redevelopment, one unusual donor came forward: Silicon Valley-based Apple. Here’s what Lookout learned about the tech company’s loan for the project.
With ground now broken on Pacific Station South in downtown Santa Cruz, as Lookout reported last week, how did $5 million in Apple money help fund the project?
Though Apple as a company has little presence in Santa Cruz County, the tech giant’s funding is a loan and part of its financial commitment to building housing. Launched in November 2019, the Apple Affordable Housing Fund committed to a $2.5 billion plan to affordable housing construction.
That $5 million loan comes to the City of Santa Cruz project via Housing Trust Silicon Valley, part of Pacific Station South’s total funding of $48.8 million.
Once complete, the Pacific Station South development will be a seven-story, mixed-use building with 70 100% affordable residential units, ground-floor commercial space and medical office space for both Santa Cruz Community Health and Dientes Community Dental Care on the second floor.
“It does take quite a bit of public and private monies to get these projects off the ground — there are roughly six funding sources utilized to make this project happen,” Jessica de Wit, manager of the city’s Housing & Community Development division, told Lookout. She says the loan is instrumental in helping to cement the project in the city’s development pipeline.
City spokesperson Elizabeth Smith said the loan is contingent on an 18-year term with a 2% interest rate.
“It is a ‘residual receipts’ loan or ‘soft’ loan, meaning if the cash flow is tight, the annual payment can be deferred,” she explained.
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Since the fund’s launch in 2019, Apple has provided $150 million to Housing Trust Silicon Valley, intended to create new affordable housing projects.
Apple’s goals are straightforward:
- Accelerate and expand new housing production.
- Jump-start long-term development that would otherwise not be possible.
- Help first-time homebuyers purchase homes.
- Support new housing and programs to reduce homelessness.
The housing trust is a significant partner of both the City of Santa Cruz and Santa Cruz County, working to raise and distribute funding toward housing projects countywide. The nonprofit organization is led by Santa Clara County and the Silicon Valley Leadership Group, affordable housing activists, local businesses and foundations, who have all come together over the past 20 years to support affordable housing development.
Previous Santa Cruz projects the trust supported include:
- $875,000 toward the 831 Water Street project in July 2021.
- $2.052 million toward the 1482 Freedom Boulevard project in May 2020.
- $500,000 toward Water Street apartments in October 2017.
