HomeMy WebLinkAbout20121442.tiff ilk
GREELEY/ WELD
HOUSING AUTHORITIES
844. P.O. Box 130 WELD COUNTY
Greeley, Colorado 80632-0130
(970) 353-7437 June 1, 2012 COMMISSIONERS
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(970) 353-7463 Fax 2012 JUN -4 A II: UI
(800) 659-2656 TTY Relay
RECEIVED
Commissioner Sean Conway
Chairperson, Weld County Board of Commissioners
P.O. Box 758
Greeley, CO 80632
Dear Commissioner Conway:
We have received a request to partner with Accessible Space, Inc. (request enclosed). Accessible
Space is in the process of developing a 60 unit Elderly Housing Development in Greeley. They
are scheduled to submit a July application for Low Income Housing Tax Credits issued by the
Colorado Housing and Finance Authority. Greeley Urban Renewal has awarded $500,000 in
HOME funds for this project and the Housing Authority of the City of Greeley has agreed to set
aside and project base 20 of its 446 Housing Choice Vouchers to the development. The
allocation of vouchers will allow Accessible Space to serve clients living well below the poverty
line.
The advantage of partnering with a Housing Authority is that even with only a .01% ownership
interest in the development it would, under Colorado Law, provide our property tax exemption to
the project. The Authority has only done this one time in the past with a property known as West
Park Village Apartments. Since partnering with Accessible Space would result in a loss of
approximately$40,000 in tax revenue, the Board of Commissioners of the Housing Authority of
the City of Greeley has directed me to seek input and comments from the City of Greeley, Weld
County Government, and the School District Six.
We would sincerely appreciate any comments or concerns you may have prior to June 26, 2012.
For questions or additional information please call me at (970) 353-7437 x103
Sincerely,
Thomas Teixeira
Executive Director
Housing Authority of the City of Greeley
2012-1442
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Housing Authority of the City of Greeley • Weld County Housing Authority A
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Accessible Space,Inc.
May 10,2012
Mr.Tom Teixeira
Executive Director Via Email and Fed Ex Delivery
Greeley-Weld Housing Authorities
PO Box 130
Greeley,CO 80632
Re:Property Tax Exemption Request
Dear Tom,
Accessible Space,Inc.(ASI)is grateful for the opportunity to explore a partnership with the
Greeley/Weld Housing Authority on our proposed 60 unit Greeley Elder Housing
Development.We sincerely appreciate the significant support that Greeley/Weld Housing
Authority has already shown by agreeing to provide 20 project based vouchers,enabling the
development to target and serve extremely low-income seniors including frail elderly who
ordinarily cannot afford to live in tax credit housing.
Partnering with Housing Authorities to gain property tax exemption for affordable housing has
been a very common practice in Colorado since the state passed a statute allowing property
tax exemption for any project with any level of Housing Authority ownership. Locally, the
Loveland, Longmont and Fort Collins Housing Authorities have partnered with affordable
housing developers to provide property tax exemption for affordable housing projects.
We understand that this is a relatively new suggestion for Greeley/Weld Housing Authority,
but we think this project is an excellent choice to be the housing authority's partner. This
project will have a minimal impact on the services in the community.The unit mix is 75%one
bedrooms, so no more than two people in a unit and 25% two bedrooms also likely two
people who want an extra room. The property will be restricted to individuals over 55 years
and will target those with special need or disabilities.This project will have no impact on local
schools since we are not housing families.Most of the services that our residents will access
are already in existence and are funded through local philanthropy not property taxes such
as Food Banks,Meals on Wheels and Visiting Nurse services.
We understand the Housing Authority is well aware of the challenges of developing
affordable housing in the Greeley market due to the low rents and the fixed costs of operating
multifamily housing. Our estimated property tax payment for this property would be$40,000
(or$663/unit).That would be a 15% increase to our expense budget and would mean the
property could support$300,000 less in permanent debt resulting in a shortfall in the sources
and uses.Additionally,the project would face negative cash flow as early as year five.
2550 University Avenue West,Suite 330N 651-645-7271 (1-800-466.7722) Fax:651-645-0541 Equal Opportunity Employer
Saint Paul,Minnesota 55114 TDDNoice: (800)627-3529 Equal Housing Opportunity
Mr.Tom Teixeira
May 10,2012
Page Two
The mechanism for providing the property tax exemption to the project is straightforward.The
property will be owned by a limited liability limited partnership(LLLP).The general managing
partner and .01%owner will be Accessible Space, Inc. The limited partner(99.98%owner)
will be the Low Income Housing Tax Credit Investor.They are largely a silent partner and do
not have anything to do with the day to day management of the property.We are asking that
Weld Greeley Housing Authority join the partnership with a.01%ownership.This ownership
would come with no management responsibilities and no liability for the project or debts.The
project budget would cover any costs of the housing authority entering the partnership(legal
review of documents primarily).
We are attaching pro formas showing the property operating with property tax exemption and
without as examples of the challenges.Please let me know if you need any additional
information to move this request forward.Again,we greatly appreciate the support the
housing authority has shown and fully acknowledge that we could not develop this special
project without your help.
Sincerely,
c-1 Ja_.
Dan Billmark
Director of Real Estate Development
CC:Stephen Vander Schaaf Carol E.Larsen
President/CEO Community Development Coordinator
Accessible Space,Inc. Greeley Urban Renewal Authority
Sarah Alden Batt Eric Novak
Principal Consultant President
Dwelling Development,LLC. Praxis Consulting Group,LLC
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