Updated at 10:39 a.m. Wednesday to correct who the general contractor is for the project.

Water damage and cost overruns have halted construction on Battery Point Apartments — the 162-unit affordable housing project being built near Joe Hamilton Elementary and Crescent Elk Middle School.

Three days after a former Del Norte County supervisor told the Crescent City Council that the project disturbed him, Bill Rice, president of the Synergy Community Development Corporation, acknowledged the work stoppage. But his description of who the building’s tenants will be is different from Roger Gitlin’s “completely Section 8 assisted living project” characterization.

It’s true that the complex’s senior apartments will be offered to those receiving project-based housing vouchers through the Crescent City Housing Authority, Rice said. The remaining 120 units will go to families, including those who are not very-low income, but who can’t afford market-rate rent.

“When we did canvassing to have people show up for our town hall meetings, we went to Pizza Hut, Starbucks, I was at Safeway, in the parking lot at Walmart, Denny’s,” Rice told Redwood Voice Community News. “It didn’t matter if someone was 18 years old at Dutch Bros or the middle aged waitress at Denny’s, they all were saying how stressed they were to be able to find reasonable housing that wasn’t old or beat-up at a rate folks can afford.”

The Crescent City Council was introduced to Battery Point Apartments in August 2022. Rice’s organization, a nonprofit based in Los Angeles, had teamed up with another nonprofit, Step Forward Communities, of San Clemente. 

The two sought, and received, support from the Council to obtain a $7.5 million Infill Infrastructure Grant, a state program that aims to expedite the development of affordable and mixed-income housing. They were also pursuing federal tax credits to build the apartments.

When the developers broke ground on the site at Gary and E streets in September 2024, Rice said that of the 162 units, 40 will be offered to seniors, 30 will be for low-income families and 90 units will be available for workforce housing. 

The general contractor is IMG Construction Argenta Construction Group.

The development will consist of three buildings: Building B and C, which are slated for families, will be stick-built, Rice said. Building A was built at a factory in Henderson, Nev. and was shipped to Crescent City. According to Rice, the goal was to meet what Housing Authority Director Megan Miller said was a high demand for senior housing.

There was also a concern about the ability to get workers for the project since it was competing with other developments associated with Cal Poly Humboldt, Rice said. Early in the project, he said, labor was more constrained and there was a thought that if contractors and subcontractors in the Eureka area were getting state prevailing wage jobs at Cal Poly, why would they make the drive to Del Norte.

“We thought if we have 40 of these units built, it would be 41 with the manager’s unit, and trucked in, we would help deal with the labor issue, or potential labor issue,” he said. “We could speed up the time on getting that property delivered for the benefit of low-income seniors.”

Synergy had hoped to begin moving tenants into the senior apartments by November 2025, according to Rice. But because of revisions being required to address higher seismic risks, a higher level of engineering was required, which led to cost escalations of about $6 million in 2025, according to Rice.

Though the plans were already approved, the manufacturer’s engineers said additional work on the modular structure was needed, Rice told Redwood Voice.

“We received the units delayed from the factory,” he said. “The units we received then got craned in place slowly because each one needed 275 welds. Then the first floor (units) needed to have the bottom removed and steel reinforcement added to each one — that should have been done in the factory, but it had to be done on site because of the changes.”

The developers and general contractor were working with Pacific Power and the city to install an elevator and finish the structure when storms came in December. Synergy had been awarded a $9.7 million HOME Grant from the California Department of Housing and Urban Development that would have paid for its subcontractors, Rice said, but state officials wanted a “deeper assessment” of the water damage.

“We began that process with the state in consultation with the city,” Rice said, adding that the general contractor engaged Palm Restoration from Brookings and Colorado-based Commercial Restoration Company to inspect the site last week. “We’re waiting on those final reports and we will provide those to the state.”

According to Rice, however, the state is moving forward with the HOME Grant funds, which will allow Synergy to pay its subcontractors. He said Synergy, Step Forward Communities and IMG Construction have a goal of being able to open the apartments up to tenants in the third quarter of this calendar year. 

At last week’s City Council meeting, Gitlin, a 16-year resident, urged elected officials to “tap the brakes” on the housing development that’s underway. He referred to his tenure as a Del Norte County supervisor, saying that he tried to air his concerns about what he felt was the wrong sort of growth for the community, but it didn’t resonate.

“Who’s going to fill those buildings when they are no longer delivering Section 8 certificates to overwhelmed Los Angeles County and the Bay Area?” Gitlin asked. “What do you think is going to happen? They’re going to come to Crescent City. Is that what you want for the future?”

After the public comment period, Miller sought to correct what she said was misinformation concerning who the senior tenants at Battery Point Apartments will be. Currently, there are 78 potential tenants on the waiting list to receive project-based housing vouchers, she said. There will only be 40 units available when they come online.

Of the 78 people on the waiting list, 72 are local applicants and are given priority over the six who are from outside of Del Norte County, Miller said.

“Those last six people… we’re not going to get to them when we fill that building,” she said. “I also looked at those six who were from out of the area and none of them were from LA or San Francisco. They’re from closer regional areas — Tehama County, Humboldt County, Butte County. And we do have a large number of out-of-county applicants on our Housing Choice Voucher waiting list because we’re never pulling from that list.”

According to Miller, the last time the Housing Authority offered a voucher to a recipient from outside the county was in 2020.

City Manager Eric Wier said that the last time an out-of-county resident actually used a voucher might have been 2015. According to him, in order to use their voucher, a recipient has to have lived in Del Norte County for more than a year.

“The housing need is such that we have had vouchers that could not be used,” he told Redwood Voice. “We have demand and we have people that want to use them, but we don’t have the housing stock.”

Following Miller’s presentation to the City Council, Bob Brown, acting planning director and a consultant with SHN Consulting, noted that in Crescent City, where the area median income is $35,540, 17% live below the poverty line. The state average is 12%.

Only about 1,800 working-age people are employed, Brown said, citing data from the U.S. Census Bureau and other state sources. Of those, 35% make less than $20 per hour and 50% are in retail, accommodations and food service, health care and social assistance, office and administrative support. A living wage in Del Norte County is about $47,000 annually, Brown said, citing the Massachusetts Institute of Technology.

“There’s a gap between what it takes to live here with a normal living wage and what the actual income is here,” he said, reminding councilors that the area median income is $35,540. “We have this large gap here, which really supports the need for the Housing Authority’s voucher program and some of the housing that’s currently being built here.”

At the groundbreaking ceremony two years ago, Rice told the Wild Rivers Outpost that no senior will pay more than 30% of their income on rent. That’s $400 to $500 for a one-bedroom and up to $600 for a two-bedroom.

On Thursday, Rice told Redwood Voice that there will be 4-bedroom apartments offered to families for $1,800 that have ocean and redwood forest views. He noted that family and workforce housing will be offered to folks who make 70% of the area median income. Even if they get a better job, they’ll be able to continue living at Battery Point Apartments until their annual income is 140% of the area median income.

“You can stay there, keep getting better jobs and use that to save for your family to be able to get into a house,” he said.