My experience is that "churches" often own much of the property in inner city poor areas. They can afford to hold it, because of favorable tax treatment.
The article suggests this project is replacing a "church", but I would doubt that is the case.
Here’s the link to the newspaper article reporting the City of Pasadena bought property from a church for the Heritage Square affordable housing project:
http://www.pasadenastarnews.com/news/ci_6486407