The Residences at Dorsey Station, a 162-unit affordable apartment project in Tempe, just cleared a major money hurdle that shifts the plan from PowerPoint to actual construction prep. Sitting on roughly 7.5 acres at Dorsey Lane and Apache Boulevard, the building is expected to be the first of five in a roughly 400-unit master plan. Developers say the latest deal should unlock demolition and early site work this summer, inching long-promised affordable homes closer to the light-rail corridor and Arizona State University.
According to Boston Capital, it has closed construction-to-permanent, tax-exempt bond financing for The Residences at Dorsey Station. In a July 1 announcement, the lender described the community as a 162-unit affordable multifamily development with studio, one-, and two-bedroom layouts near the Tempe light-rail station. The release quoted Palindrome leadership saying that, along with its partners, the team is excited to bring a high quality affordable multifamily housing project to the City of Tempe.
Per the City of Tempe, the broader Dorsey Station vision calls for about 400 mixed-use units, with 90 percent designated as affordable, plus ground-floor grocery space and neighborhood amenities. The city’s housing page notes that the site, the former Apache Central Center, covers about 7.55 acres. Demolition and archaeological studies are anticipated to begin in July 2026, with construction possibly starting in winter 2026/27. The city also points out that it purchased the property in 2021 after the anchor grocery closed and is using Hometown for All funds to prepare the parcel for redevelopment.
Developer partners and a second building
Palindrome Properties Group is teaming up with Urban Development Partners on the project, and the duo is not stopping at one building. They have already proposed a 72-unit follow-up known as Encore on Dorsey Station and submitted a $2.5 million 9-percent LIHTC application, according to Multi-Housing News. That coverage also notes that the city has entered into a long ground lease with the developers so the land stays under public control while private partners build out the master plan. If both phases move ahead as planned, Dorsey Station will deliver a sizable block of income-restricted homes within easy walking distance of transit.
Funding and approvals
The Industrial Development Authority of the City of Tempe included the Residences at Dorsey Station on an October 2025 agenda that discussed issuing multifamily housing revenue bonds in an amount not to exceed $50 million, a standard step toward debt financing for the project. The IDA notice and agenda are part of the routine approvals cities use to support affordable bond financings. Developers say those approvals, combined with tax-credit equity and the construction-to-permanent loan, round out the financing stack required for demolition and early site work to proceed. The IDA agenda shows the board was briefed on the financing application last year.
Why this matters
Tempe has been rolling out tools to lock in long-term affordability as the city grows, and coverage of the project notes that local planning work estimated demand for roughly 21,324 new housing completions by 2040. The Hometown for All program, which helped accelerate the nearby La Victoria Commons development earlier this year, is one of the main mechanisms Tempe is using to fund land purchases and site preparation for projects like Dorsey Station, according to the City of Tempe and reporting by Multi-Housing News. For neighbors and housing advocates worried about displacement and food access, the plan’s promise of a new grocer plus income-restricted apartments is the kind of tradeoff city leaders argue can keep Tempe’s growth at least somewhat equitable as the area densifies.
