Fort Collins Downtown Development Authority and Housing Catalyst are moving forward on a partnership to build low-income housing in Old Town.
The DDA board of directors on Thursday is expected to sign an intergovernmental agreement with Housing Catalyst (formerly the Fort Collins Housing Authority) to advance steps toward creating affordable housing on DDA-owned land at 140 E. Oak St., the former home of the Elks Lodge.
The exact number of apartments is still undetermined, according to DDA Executive Director Matt Robenalt.
The board has eyed two potential projects downtown: a four-story building with surface parking, 49 apartments and a cost of about $14.9 million. The larger option, a five-story building with 66 units, would include underground parking and would cost about $23 million. Both would include commercial and retail space.
But those plans included the Elks site plus an adjacent property that is no longer available. How the smaller lot will affect the size of the project will become clearer in the next few months once an architect and engineer design team is hired. But Robenalt expected the impact to be “nominal.”
Current plans call for the DDA to own the retail space and for Housing Catalyst to own the apartments.
Housing Catalyst is in the business of providing low-income housing to those in need in Fort Collins. It built Redtail Ponds permanent supportive housing and Village on Horsetooth apartments, and is building permanent supportive housing for the currently homeless or near homeless in the former Midtown Arts Center on Mason Street.
It also receives vouchers from the federal government, used to secure housing throughout the community.
The DDA has long recognized the need for affordable housing, particularly for workers in downtown businesses, including food service workers, assistant managers or general managers, entry-level marketing workers, teachers, front desk hotel staff, property management workers and others in similar positions, Robenalt has said.
The exact programming for the project is still preliminary, he said, but the plan is to create an “80% blended project,” which means there will be a range of units for people earning 30% to 80% of area median income, but the overall average of units will not exceed 60% AMI.
The city’s AMI is $59,600 for a single person or $85,100 for a family of four.
How funding works
According to DDA documents, Housing Catalyst plans to apply for a 4% Low Income Housing Tax Credit from the Colorado Housing Finance Authority next August that would help pay for some construction costs.
The tax credit will require Housing Catalyst to use tax-exempt bonds for the project, estimated to cost between $15 million and $25 million, depending whether a parking structure is included.
Once the grant is secure, it could clear the way for construction to begin in 2021.
Federal housing tax credits are awarded to developers of qualified projects. Developers sell the credits to investors to raise capital (or equity) for their projects, which reduces the debt that the developer would otherwise have to borrow. Because the debt is lower, a tax credit property can in turn offer lower, more affordable rents, according to Housing Catalyst and the DDA.
Investors receive a dollar-for-dollar credit against their federal taxes each year for 10 years, Housing Catalyst said. The amount of the annual credit is based on the amount invested in the affordable housing.
The DDA has not said how much money it will contribute to the project in addition to the land, but it wants to avoid the use of competitive funding, Robenalt said, so the project will rely on state and federal tax credits.
More will be known as details of the project are sussed out, he said.
Plans for the old lodge have evolved
The DDA purchased the 22,400-square-foot site in 2008, deconstructed the building and has used the property mostly as a staging area for downtown construction projects.
In 2017, Robenalt and board member Jenny Schultz were tasked with exploring potential redevelopment partnerships for the property as affordable housing and commercial mixed use.
They have spent the last year talking with state-level affordable housing finance specialists to understand federal tax credit financing programs and meeting with affordable housing development groups.
The building opened as a YMCA in 1907 and served as home to the Elks Lodge No. 804 for more than 60 years before the Elks moved to Mulberry Street and sold the building to the DDA for $2.8 million.
The DDA bought the site intending to combine it with the Remington parking lot next door for a new downtown hotel and conference center.
That was then — a time when a downtown hotel was highly desired and before the Elizabeth Hotel came to be — and this is now, when housing affordability is a critical issue facing the city.
Both Robenalt and Housing Catalyst Executive Director Julie Brewen serve on the city’s homeless advisory committee that will be charged with making a recommendation to City Manager Darin Atteberry on possibly expanding services and facilities for the city’s homeless population.
Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado.
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