Sep. 3--A plan to turn a hunk of Alma Street into housing for the elderly and the working poor has city officials enthusiastic. Now the question is how the 101-unit complex will fit into the surrounding neighborhood.

One of the larger low-income housing developments in the city, the five-story project would span one full side of Alma's 800 block, from Homer Avenue to Channing Avenue. The housing would sit above ground-floor offices and shops, replacing a former electrical substation, Ole's Car Shop, Palo Alto Hardware and an office building.

The $52 million project, a partnership between the city and nonprofits Eden Housing and the Community Housing Alliance, has been touted by the city council as a rare chance to house low-income workers near downtown and Stanford University jobs. From that standpoint, its size is a virtue. But it may emerge as a key issue as the project enters the design review process with a first look from the Architectural Review Board on Thursday.

"It is a fairly dense project, but we haven't determined at this point if it's too high for the area or not," said Elena Lee, senior planner for the city. The central question is "how it fits in with the overall fabric of the area."

Kathy Schmidt of Eden Housing said she thinks it could work well. She noted that city plans for Alma Street provide for higher density there because of its proximity to downtown and public transit. Also, the property backs up to 800 High St., a four-story condominium complex.

"This is the type of housing the city has been looking for -- work force housing," Schmidt said. "That's very much part of the (city's) South of Forest Area plan."

The city last year signed off on a development agreement that turns over the former utilities substation site for the project at no cost to the developers. Palo Alto also pitched in $3.5 million toward the $4 million purchase of Ole's Car Shop, which will be torn down, and it may chip in more money as the project advances, said Cathy Siegel, the city's advance planning manager.

Siegel said the project is large, but it's important to build a good number of units on the site to take advantage of the opportunity.

"It's really tough to find sites to build affordable housing, and it's hard to get the financing," she said. "You'll maybe see one new development that gets completed every three years.

With 1,456 existing nonprofit-run affordable housing units in the city, the Alma complex would represent about a 7 percent jump in the overall stock. Other projects in the downtown area have filled up quickly, Siegel said.

This is the first low-income housing proposal in the city to put the units above ground-floor retail and commercial space, Siegel noted. The "mixed-use" approach is appropriate for the downtown area, she said, and the extra revenue should help subsidize the housing.

The project would be built in two stages. First, the electrical site and the car shop would be replaced with 50 units of housing for families. The Palo Alto Hardware building would be demolished but the business would be relocated in the first floor of a new building with housing above. Second, the existing hardware and office buildings would be razed to make way for 51 units of senior housing and 6,370 square feet of commercial space.

E-mail Will Oremus at woremus@dailynewsgroup.com

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