News Tidbits 3/12/17: Affordable Housing Week 2017

13 03 2017

It’s been a busy week. Let’s start by reviewing some of the entrants for the city’s affordable housing funds.

The Ithaca Urban Renewal Agency will be holding public hearings on March 16th and 23rd as part of the process to determine who will receive money from the Housing and Urban Development (HUD) grants awarded to the city. The 25 applicants, same number as last year, range from jobs training to community services to the development of affordable housing. All summed up, there’s $1.982 million requested, and $1.149 million available; that’s up from $1.85 million requested in 2016, with $1.54 million available (about $273,900 of that came from the returned funding for INHS’s cancelled project at 402 South Cayuga Street). In fact, the amount of money available is the lowest it’s been in a few years – in 2015, $1.78 million was requested out of $1.215 million available, just a little over two-thirds of the total. With the increasing requests, the chances for funding have gone down this year.

Without discounting the value of the other applications, the focus here will be on the real estate development projects. For the record, writing about a project is neither an endorsement or opposition from this blog.

1. The big new proposal coming out this year appears to be Lakeview Health Service’s plan for the corner of North Meadow and West Court Streets on the city’s West End. I expanded on the basics in a Voice article here, but for the blog’s sake, we’ll take a look at the finances.

In terms of leverage, it’s a pretty big project – a request of $250,000 towards a $20,081,186 project. However, keep in mind this project is only eligible for HOME funds and not CDBG (Federal Community Development Block Grants), and the city only has $295,245 in HOME funds to work with after overhead is taken into account – this is a pretty substantial request for something still in the conceptual stages.

The project fills a substantial by providing 50 units of affordable rental housing, all 1-bedroom units, in a 5-story building. Not only that, but half of those units would be set aside for those living with psychiatric disabilities. Ten of the general housing units would be available to those making 50-60% of area median income (AMI, about $27-$32k), with the other 40 going for less than or equal to 50% AMI. Those units will be interspersed with the general affordable housing. The special needs residents will be considered case-by-case; it’s for those who are generally independent, but may need assistance in stressful or difficult times. Lakeview will maintain an office on the first floor that will be staffed 24/7.

Some retail space will also be available on the first floor, which helps to cover the operational expenses, and meets the city’s goal of a more dense and vibrant West End. 17 parking spaces will be provided, so it’s expected the residents will utilize bikes and mass transit. The design will be slab-on-grade, with a deep foundation – soil in this part of the city is poor due to the high water table, so projects either have to be one or two floors with slab foundations, or they have to build enough floors to accommodate the costs of driving piles into the ground, in this case 80 feet down. This is something to keep in mind with the waterfront rezoning, as the soils are pretty similar.

The pro-forma assumes $730,300 in income in the first year after vacancies are noted, and about $313,500 in expenses, leaving a little over $416,800 for debt service. Everything goes up a little bit each subsequent year for inflation. The debt service is scheduled to last for 50 years.

Rochester’s PLAN Architectural Studios is the architect, so expect a modern design not unlike the cancelled concept plan for the Elmira Savings Bank site on West State and Meadow. The preliminary floor plan suggests the retail will face West Court Street rather than the Meadow/13 corridor.

As with many affordable projects, this one has a rather extended schedule due to the need to compete for public grants in tandem with private loans – funding applications are being submitted this year with loan awards during 2018, including the IURA’s. Construction would be from October 2018 to April 2020, with rent-up shortly thereafter. It’s odd to think this likely won’t even show up in the 2020 census, but we’re starting to get that far into the decade.

2. Meanwhile, Habitat for Humanity is continuing to move forward with their 4-unit townhouse plan at 402 South Cayuga. The non-profit has agreed to purchase the land from the city for $32,000, a below-market price that the city is fine with accepting, given Habitat’s plans for 4 owner-occupied affordable townhomes for those making 30-60% area median income (AMI). They are requesting $80,000 towards the $270,000 cost. It appears that Habitat’s splitting it into two phases, two units in each – given the small size of their organization, it’s a sensible approach. $540,000 for ~5200 SF of units is also quite a deal, at about $104/SF, about half the cost of an INHS project. Habitat does have volunteer labor that it can utilize.

Habitat is hoping to parlay the Morris Avenue two-family they’re doing later this year into sustained interest and funding for Cayuga Street – attracting donors with one city project, who might be interested in donating time and dollars to the next one. Like with Lakeview, construction is likely on a 2018-2020 timeframe. They’re also only eligible for HOME funds, so either Lakeview or Habitat will not be getting their full request, possibly both.

3. On the economic development side, TCAction is requesting $84,200 towards their $8.25 million childcare center at 661-665 Spencer Road. The project is part of the Amici House plan and was approved by the city concurrently, but technically separate from the 23 units of vulnerable youth housing being provided next door.

Named for a late, long-time TCAction employee Harriet Giannelis, the project helps fund the site acquisition – one of the land parcels is owned by the county, and TCAction has a $184,000 purchase lease-back agreement (the county bought the land from a private owner, and they’re currently leasing it to TCAction), which will be paid off partly with the IURA funds. The new 7,010 SF childcare center will provide daycare and early-education programs (Head Start) to 40 low-income children. Although promising three new jobs in the application, TCAction expects 21 Full-time equivalent positions to be created. It’s easier to provide an employee’s lifetime income documentation for 3 staff vs. 21. Welliver will be the project contractor, so expect local union labor.

Most of the other funds come from county, state and federal grants – another $500,000 comes from a loan with M&T Bank.

4. Also on the economic side is Finger Lakes Re-Use’s expansion plan at 214 Old Elmira Road. the non-profit has refined their plans for a new mixed-use expansion, and plans to start the city’s formal project review process later this month. Some of the numbers have been tweaked a little bit, but the basic components are the same – Finger Lakes ReUse would work with Tompkins Community Action (TCAction) to bring a new 4-story, 26,100 square-foot (SF) building to FLR’s property at 214 Old Elmira Road. The first floor would expand FLR’s retail operation, while the upper floors would provide office space for FLR, and 22 units of transitional housing for formerly homeless individuals. Plans also call for an 8,100 SF warehouse for salvaged lumber/wood, and a 600 SF pavilion. 79 parking spaces are included in the project.

As with TCAction’s Giannelis Center, 9 FTE jobs are expected to be created by the $10 million project, but FLR promises to provide previous income documentation for 3. The monetary request from the CDBG funds is $100,000, and they will also be using Welliver. Welliver seems to be the safe choice when a developer wants subcontracted or direct local union labor.

The application states the $100k is going towards site acquisition, which I’m not fully following since they own the property and it doesn’t appear any new property is to be acquired. Perhaps the site has legal stipulations that have to be bought away? It’s not totally clear.

If I can be an architecture critic for a moment, I like the warm colors, but that largely blank east stairwell is kinda bleak. Maybe use those orange panels on that as well? Or another warm color?

Anyway, we’ll find what the IURA thinks; funding will be determined by the end of April, and formally awarded in June after the city’s Planning Committee signs off on the disbursement.

 

 

 





News Tidbits 2/18/17: Credits and Loans

18 02 2017

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1. Over in Lansing village, it looks like the new Arleo medical office building is starting to moving forward. A sketch plan of the project was presented at the village planning board’s meeting earlier this week. Although Lansing doesn’t upload accessory docs like site plans and elevations, this one has been floating around for the past several months in marketing material as “Cayuga Ridge”. Quoting the May 7th 2016 news roundup:

“The new one-story building, which appears to be designed by Binghamton-based Keystone Associates, would be off of Warren Road, although it looks like the building would be accessed from a driveway coming off of Uptown Road. The 2.71 acre property north of 100 Uptown Road is zoned “Human Health Services District” by the village, and borders undeveloped land owned by Cornell, and several other suburban medical office buildings built over the past few decades. The resolution on the attached site plan is too low to determine the square footage, though it looks to be in the low tens of thousands.”

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2. For those who like their cottages tiny – it looks like Schickel Construction has begun work on the spiritual successor to their 140-unit Boiceville Cottages project in Caroline. The 40-house rental development is called “La Bourgade on Seneca”, and is located in the town of Hector, in Schuyler County just outside of Burdett village. For the record, Bourgade is a French term for an unfortified village or settlement. More details can be found on the website here. There will be two cottage types available -, “The Classic”, a 2-bedroom, 900 SF plan that will rent at $1,495/month, and “The Spacious”, a 2-bedroom with a dormer loft space totaling 1,000 SF and renting at $1,695 month. The house very much like their Boiceville cousins, but with angled eaves (dunno what the correct term is and google’s not helping – if there’s an architect reading, please chime in). All units will have lake views.

Personally, I see this as a stretch for the Ithaca market, since it’s 25 miles west of the city. But it might tap into a more plebeian contingent the wine country crowd, the wealthier of whom have taken to building grand vacation or permanent homes along the Finger Lakes in recent years. The first 9 units, three clusters of three, are currently under construction, as is a community center. Delivery is expected in May 2017.

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3. It looks like Ithaca College is putting some more thought into their housing needs. The college has been meeting with planning firm U3 Advisors to explore the possibility of new off-campus student housing.

U3 Advisors is already familiar with the area, as they are also under contract with Cornell to formulate their off-campus housing plan. Unlike Cornell, however, Ithaca College has no plans to grow enrollment – the master plan expects it to stay steady around 7,000. However, many of the dorms are reaching the end of their useful lives, meaning that the college can either sink a fair sum into renovation and replacement of utility systems, or tear down and build anew. An off-campus option could either be a private entity on private land, or a deal on IC-owned land like what Cornell and EdR are doing with Maplewood. A 200-300 bedroom off-campus option could mesh with the town of Ithaca’s visions for a walkable South Hill neighborhood on the intersection of Route 96 and King Road.

It’s still just studies and meetings at this point, but as the oldest dorms hit 50 years old on South Hill, there might be something fresh in the pipeline. We’ll see what happens.

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4. Ithaca’s West End will be welcoming a new tenant in the next couple months. Courtesy of Nick Reynolds over at the Times, the USDA is shifting its regional office out of Community Corners in Cayuga Heights, and into Fulton Meadows, a commercial office building at 225 South Fulton Street. the move is being undertaken in anticipation of the construction of Tim Ciaschi’s new Cayuga Medical Associates office building, which is set to get underway at Community Corners later this year.

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5. Looks like we have an idea of the price tag for Visum Development’s 201 College Avenue. According to a construction loan filed with the county on the 15th, S&T Bank loaned Todd Fox’s company $7,870,673 to help cover the costs of the project. The breakdown in the filing says $6,841,038 for hard construction costs (materials/equipment/labor), $507,000 in soft costs (permits/legal/marketing/financing fees), $300k in contigency and $226k in interest reserves. Add in the $2.64 million for the land purchase, and the total comes to $10,514,180.

That’s something of a premium because the project is on an accelerated schedule after the big hullabaloo with Neil Golder and the city Planning Board last fall. Note that the loan doesn’t cover all the costs and that there is money from other sources, like cash equity from Visum itself.

S&T Bank is a regional bank based out of Western Pennsylvania, but they’ve been making inroads into Ithaca’s commercial lending market. S&T Bank also financed the construction of the Holiday Inn Express that recently opened on Route 13, lending $5,973,750 to the hotel developers.

Quick aside, I think this is the first time I’m seeing the square footage calculated out – 201 College will be 33,398 SF.

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6. Hopefully this runs after by INHS refinancing explainer, so it makes more sense. Quick rehash, low income housing tax credits (LIHTCs) are sold to banks and similar financial institutions so that they get the tax credit, and the affordable housing developer gets the money they need to move forward with a project. With that in mind, here’s an interesting though unfortunate tidbit from INHS’s Paul Mazzarella:

“This following may be more than you want to include in this article, but it is relevant.  The pricing of tax credits exists in a marketplace where they rise and fall in value.  In past projects completed by INHS, we’ve received from $0.91 to $1.02 of equity investment for each dollar of tax credit.  The pricing of tax credits has recently plummeted because of the recent election and the uncertainty in DC.  This is mostly due to discussions about changing the corporate tax rate.  A lower corporate tax rate will mean that companies have less profits to shield from taxes and therefore the demand for tax credits will be reduced.  Even though no changes have yet been made to the corporate tax rate, just the discussion about this has reduced the pricing of tax credits to around $0.80.  What does this mean for INHS? It means that the project that we’ve been working on for several years suddenly has a funding gap that didn’t exist a few months ago, due entirely to investor’s fear of risk due to an uncertain future..  This is true for every tax credit project in the country and has all of us struggling to make the pro formas work.”

Sigh. Politics.

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7. The Times has the first render for Habitat for Humanity’s two-family townhouse project at 208/210 Third Street on the city’s Northside. It looks to be the same architect as the 4-unit project for 402 South Cayuga – I can’t seem to find the architect offhand as a few designers have donated time and energy, but local planner George Frantz shepherded the project through the approvals process. Each unit is about 1500 SF. The plan for the $305,000 project is to break ground in April and have the move-in ceremony in Spring 2018. As with all local Habitat projects, a portion of the construction will come from volunteer labor, including 500 hours of “sweat equity”, and homeownership classes that the two recipient lower-income families (making 60% AMI or less, $32,000/year) will need to complete as part of the deal.

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8. Wrapping this up with the local agendas for next week – the town of Ithaca will be looking at a home B&B permit on Bostwick Road, a retaining wall for Ithaca College’s track, and finishes touches on the Maplewood approvals. The city’s project review meeting indicates the city plans to look at the subdivision at 109 Dearborn Place, Declaration of Lead Agency and Environmental Review for the 11-unit 107 South Albany Street plan,  and “Approval of Conditions” for City Centre, which is just making sure they’ve completed everything asked for in the final approval. In sum, nothing too exciting at the moment, but we’ll see if the city has any new projects coming up when the actual PB agenda comes out next week.

9. Quick note to wrap up – the woman behind the Rogues Harbor Inn in Lansing has purchased a prominent and historic building on Freeville’s main drag. Eileen Stout purchased 2 Main Street, a mixed-use building with restaurant space, a tile shop and three apartments, on Thursday for $132,000. The seller was Tompkins Trust and it’s well below assessment – doesn’t look like a foreclosure though. The bank bought the property for almost double the price in May 2016.