Though officials acknowledge the slim chance of success, the redevelopment of the 1950s-era Love Apartments on the corner of Sixth Street Court East and Martin Luther King Boulevard East is getting another chance and officials want it done sooner rather than later.
North Star Development was selected in March and a conceptual site plan is currently under review by the city. The project includes demolishing the old apartments, renaming the new units Lincoln Village, and going from 36 ground-floor units to 50 units in two-story buildings.
KC George, of the National Development Council said, “All the ducks are in a row. It has all the approvals to move it forward. But it is a tax credit application, so nothing is guaranteed. If it isn’t successful, we go back to the drawing board.”
In July, the city boosted the application by agreeing to pay $40,000 in Community Development Block Grants, but only if the application is approved. The city also agreed to split predevelopment costs at a price of $28,000. City administrator Carl Callahan said the work has to be done anyway, but the city will retain rights of environmental testing.
North Star is applying for 9-percent tax credits, which would generate about $9 million in revenue by investors purchasing the credits for a project estimated to cost $11.2 million. However, only 20 projects are selected each cycle out of an average 200 submissions. The application must first be approved and then relies on a lottery system for funding.
Our bottom line is we want the project done. If it’s not the 9 percent, we don’t want to wait another year or two.
Steven Thompson, CCRA advisory board chairman
George said the Central Community Redevelopment Agency should find out by January if the application was approved and the lottery drawing will occur in late spring.
It’s been 10 years since the CCRA purchased the apartments with redevelopment in mind. The Great Recession stalled that effort, but it has renewed, albeit with little success, in the past few years. Steven Thompson, CCRA advisory board chairman, said it was time to get it done. He said if the lottery effort is unsuccessful then North Star should pursue the less competitive 4-percent option.
Approved applications are almost always funded in the 4-percent process, but the funding is cut in half requiring developers to pursue private investment. That is a tough sell for affordable housing projects where profits are minimal at best. But Thompson said North Star represented itself to the CCRA advisory board as a company that could get it done.
“Our bottom line is we want the project done,” Thompson said. “If it’s not the 9 percent, we don’t want to wait another year or two.”