A vacant lot formerly occupied by a derelict commercial office building near the Traffic Circle will be transformed into dozens of affordable residential units for previously unhoused, low-income residents.

Excelerate Housing Group, a new company headquartered in Long Beach and founded in 2019, is building the $41 million project, which is called 26 Point 2 and includes 76 affordable units and one unit for an onsite manager.

“The local nature of this project is truly special,” CEO Dana Trujillo said in a statement. “I couldn’t imagine a better project than 26 Point 2 to be our first.”

Located at 3590 E. Pacific Coast Highway, the project will rise five stories next door to the single-story thrift store Out of the Closet. The decision to name the development after the length of a marathon was made to “represent the strength in persevering through obstacles and injuries,” according to the announcement.

Work on the site began in February, with the team re-abandoning an oil well, which was originally abandoned a century ago, to modern environmental standards. The re-abandonment took about five months, according to F&M spokesperson Amanda Earnest Fuller.

The project is expected to open in December 2023, Earnest Fuller said.

Residents of 26 Point 2 will have access to a multipurpose room with a kitchen and lounge, outdoor courtyard and barbecue areas and onsite social services through Harbor Interfaith. Funding for the social services will be administered by the Los Angeles County Department of Health Services.

The money for social services initially will come from Measure H, a sales tax that funds housing and homelessness programs approved by nearly 70% of Los Angeles County voters in 2017. Future funding will come from the California Advancing and Innovating Medi-Cal program.

“The ongoing housing affordability crisis in California is contributing to the imminent need for housing that helps those that are experiencing homelessness throughout the state,” Tahia Hayslet, executive director of Harbor Interfaith Services, said in a statement. “We are very excited and grateful for this opportunity to provide services-enriched permanent housing for our most vulnerable neighbors.”

Farmers & Merchants Bank, also a Long Beach company, and San Pedro-based Harbor Interfaith Services partnered with Excelerate to apply for and secure $1 million in grant funding for the project through the Federal Home Loan Bank of San Francisco’s 2022 Affordable Housing Program.

The grants are awarded annually through a competitive application process. This year, the bank awarded $31.9 million toward the construction of 2,712 affordable units across 39 projects in California, Arizona and Nevada.

As a member of the FHL Bank of San Francisco, F&M is the sponsor of the project and facilitated the grant application process, which only a member bank can do, according to Earnest Fuller. Once the grant is awarded, F&M coordinates the documents required to disburse the funding.

The project also is funded with Low Income Housing Tax Credits, tax exempt bonds, funding from the Long Beach Community Investment Company and Los Angeles County Development Authority, and Project Based Housing Choice Vouchers from the Housing Authority of the City of Long Beach. Additionally, the National Equity Fund is the equity partner, with construction and permanent loans provided by California Bank & Trust, Lument, Fannie Mae and the California Municipal Finance Authority.

Bridge financing was provided by Century Housing Corporation, Enterprise Community Loan Fund and National Housing Trust.

“This project will be a valuable asset to our community and we are grateful for the opportunity to assist in achieving their mission,” F&M Vice President Cheryl Ryman said in a statement.