Developer receives extension for decision on U.S. 80|[7/19/06]
Published 12:00 am Wednesday, July 19, 2006
Despite iffy odds, the lead developer of a low-income housing development financed by Katrina-related federal tax credits and planned for the former Pinewood motel property on U.S. 80 remains hopeful.
“I like our design, which is still the same. There’s some good amenities and extras in the houses,” said Jim Bergman, principal partner of Illinois-based DD Development of Sterling Inc.
The proposed 75-unit subdivision of separate family houses, to be called Thornton Hill if approved, is one of 117 developments statewide and five others in Vicksburg that received a 45-day extension past a Thursday deadline to find out which ones get approved by the Mississippi Home Corporation. That would put their deadline at Sept. 5.
MHC, a quasi-state agency that facilitates the growth of housing for low- and moderate-income wage earners, received expanded funds from the federal government as a result of Congress’ passage of the Gulf Opportunity Zone Act of 2005, soaring from $1.90 per capita to $18, making these developments more attractive to developers.
Warren County was one of 47 counties in Mississippi in the zone and thus eligible for individual or public assistance.
The legislation was geared to spur economic development in areas of Louisiana, Mississippi, Alabama, Texas and Florida devastated by hurricanes last year. It also contains tax incentives and tax free revenue bonds for businesses that locate in the zone or existing ones that made improvements.
Bonds totaling $20 million were issued last month from the county to International Paper, in the first official use of the GO Zone Act on the business side.
Bergman’s group plans to develop about 50 acres of land behind the former site of the Pinewood motel and restaurant on U.S. 80.
Financed by terms of the Low Income Housing Tax Credit, or LIHTC program, the developments stand a chance of about one in four that they will pass muster with the MHC.
The applications are graded on a point system up to 105 that credits them on whether the developer followed certain guidelines both required and optional.
“I’m confident we’re in the mid- to high-90s,” Bergman said.
DD Development fulfilled two optional items in March, when site recruiters associated with the development won approval from Warren County supervisors a resolution that adopted the GO Zone as a framework for revitalization.
The six proposed in Vicksburg are similar in that units, whether separate or attached, would be rented between $350 and $500 per month. Some units are slated to be rent-assisted with residents receiving up to $50, depending on their income.
For people who want to qualify as tenants, their income must be at or below 60 percent of the area median income. If the area is classified by the federal Department of Housing and Urban Development as non-metropolitan, as is Warren County, the national median income can be used.
Thornton Hill’s houses will be 1,400 square feet, and each will have a two-car garage. Sixty of them would be three-bedroom homes. Each would be built at a cost of $161,000 and would comply with updated International Building Code standards.
The other four applications currently on file vary from single family units to more traditional attached apartment design, with three inside the city and one outside.
One is planned next to the Bergman development on U.S. 80, between it and the Pear Orchard subdivision.
It would be a 144-unit, two-story brick apartment complex with a pool and business center, among other amenities, said Andrea Cooper of Little Rock, Ark.-based Richdale Development.
Another, filed by Warren HD I, L.P., appears alive despite vehement opposition from the Danawood subdivision adjacent to its proposed site.
Its general partner, Bill Brockman, president of Monroe, La.-based Sunquest Properties, has said other properties bigger than the 42-acre tract would be sought, but he has declined to say where they are.
Opposition has not escaped the other developments, in Vicksburg and statewide. Some residents have opposed Bergman’s development because of fears of increased traffic and crime.
In May, a group of citizens in Lowndes County sued the MHC in court. Further, the state’s congressional delegation was sent a letter signed by 37 mayors including Mayor Jeffrey Rupp of Columbus and Mayor John Robert Smith of Meridian that disagreed with how MHC allocates its $35 million in tax credits. Another intent of the letter was to emphasize that the northernmost counties in the GO Zone did not have the same kind of devastation as the Gulf Coast, where affordable housing is critically needed.
The Lauderdale County Board of Supervisors also expressed opposition in writing to MHC about proposed developments there.
About $11 million out of the $35 million has been allocated to developments proposed to the most devastated areas of the Gulf Coast.
As for the others planned in Vicksburg, they include a plan to purchase and renovate the Circle Lake Apartments at 1950 Hope St.
The renamed Madison Glen Apartments would be 68 two-bedroom units and be “a complete overhaul of the interior,” said Jonathan Cyrus of Raleigh, N.C.-based Integra Development Partners.
“There would be new shutters and brick work done,” Cyrus said, adding that 15 units would be rent-assisted.
Another one planned in Vicksburg is by a three-year-old Mississippi firm, VOB of Mississippi, that made an application to develop nine acres along South Frontage Road into a 112-unit complex.
Developers agreed that the long-term success of any housing development, especially one of this nature that offers any kind of federal tax credits or assistance of any kind, requires good management to be successful.
“For the long term, that is the key,” Cooper said.