While it took a decade to open, it only took nine months to fill up the 81 mixed-income units at the Hotel Fresno, said Lefeba Gougis, general counsel with APEC International, developer of the historic downtown Fresno building.

Fresno City Councilman Miguel Arias, Assemblymember Joaquin Arambula (D-Fresno), and Fresno Mayor Jerry Dyer cut the ribbon Thursday on the historic hotel.

With more than 2,000 applications for the rooms ranging from $400 to $1,300, the opening adds toward Dyer’s goal of 10,000 residents in the downtown corridor.

“Hotel Fresno is another piece of the downtown puzzle in terms of housing,” Dyer said .”Great cities have great downtowns. And in order to have a great downtown, you need people living there so that you have that vibrancy on the weekends and after 5 p.m. And we need to have folks living here.”

The Challenge of Affordable Housing in a Historic Building

Hotel Fresno began taking applications in January, Gougis said. The last two tenants moved in by September, filling out the 81 units.

Units range from $400 a unit to $1,300 and tenants have to be within 30% area median income and 70% area median income.

The hotel also has 10,000 square feet of leasable commercial space at the bottom, Dyer said.

“We probably went through about 2,000 applications, so it took a little bit longer than we expected and before we even opened, we had a pretty long interest list,” Gougis said.

Discussions began to acquire the building first built in 2014 and by 2016 they had the initial financing secured. But the change in mayoral administrations put the financing up in the air.

The developer the initial tax credits and it wasn’t until 2019 he had them secured again. That year, construction could begin.

But revitalizing a building built in 1912 is no easy feat. Closed in 1983, it had gone through decades of vandalism and degradation. In 2018, they petitioned to have the building put on the National Register of Historic Places. Being on the list opens up access to certain financing and some investors like historic buildings, Gougis said.

But it comes with caveats.

Gougis said it would have made more sense architecturally to move hallways, but rules around keeping the building historic prevent that. Builders had to keep certain color schemes and restore the molding.

Fresno City Councilmember Miguel Arias remembers meeting with builders and contractors arguing over the latest hold up.

“There’s nothing like the Fresno heat to convince all of us to find a solution pretty quickly, especially when we’re standing in the middle of an unbuilt hotel,” Arias said.

In the end, the project cost $36 million, averaging $450,000 a unit. The project secured $1.9 million from the former Redevelopment Agency and $1.7 million from state housing funds, Arias said. No money came from the Fresno general fund.

Hotel Fresno Moves the Needle on Dyer’s Goal to Have 10,000 People in Downtown

Having 10,000 people living in downtown would be the “tipping point” to getting the area to flourish, Dyer said.

In 2021, when his administration began, 3,000 people were living in downtown, he said.

He doesn’t think he’ll get that number during his term, but he hopes to lay the foundation for that number.

“We have a long way to go. Today we have 81 units, that may be a couple hundred people living here,” Dyer said. “It takes a lot of those projects to get to that 10,000.”

Massive Project to Upgrade Downtown Infrastructure

The biggest challenge Dyer recognized was getting sewer and water lines big enough to service an incoming population. This month, the city will break ground on a massive project to upgrade that infrastructure, Dyer said. The project will utilize some of a $50 million grant from the state. Dyer anticipates 12 months to finish that project.

To help encourage building, the city is working on securing construction loans at a more favorable rate. He also said they would do what they can for streets, curbs, sidewalks, and street lights.

“Those are generally developer costs, if we’re going to absorb those costs as a city, that allows developers to pencil out their projects better,” Dyer said.

In the next six months, construction will begin on at least one parking structure in downtown.

Dyer is also looking forward to a groundbreaking on the former JC Penny building this year or early 2025. Plans are already approved, and the project could bring 162 one-, two-, and three-bedroom units.

Arambula said bringing housing to downtown Fresno takes work.

“It’s so easy for us to talk about housing, but it’s something else to work in developing it and to see it happen within our community,” Arambula said.