Barrio Logan’s long-stalled Mercado Project was awarded $18 million in state affordable housing tax credits Wednesday, moving the project a step closer to completion after more than 20 years of delays.

The tax credits provide the final missing piece of public financing needed for the $59 million development, which will build working-class Barrio Logan’s first supermarket, along with stores, restaurants, and 92 affordable apartments on a vast vacant lot that residents have long waited to see transformed into a bustling retail and apartment center.

The City Council approved a development agreement with two private developers in June, but the project still needed state tax credits to help pay for affordable housing.

Robert Chavez, the city Redevelopment Agency official overseeing the Mercado, said the housing tax credits were critical for the project, which has housing developed by the Chelsea Investment Company and retail developed by Shea Properties.

Now, Chavez said, Shea Properties can demonstrate the project’s viability to private investors and secure financing for the retail construction, which will cost $20 million and be entirely paid for with private money. It can also begin securing building permits.

The developers have 150 days to secure the private financing. Though not guaranteed, Chavez said he is confident it will come through because investors have been very interested.

“This project has never been this far in terms of feasibility,” Chavez said. “We’ve never seen an instance where we’ve been awarded tax credits and not built the project.”

Redevelopment Agency officials have planned an Oct. 27 groundbreaking at the vacant lot at the intersection of Cesar Chavez Parkway and Newton Avenue.

Please contact Adrian Florido directly at or at 619.325.0528 and follow him on Twitter:

Adrian Florido is a former staff writer for Voice of San Diego.

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