Council rejects proposal
Published 12:32 am Thursday, January 12, 2012
Washington’s City Council, during its meeting Monday, rejected a proposal to convert the former Hotel Louise and Belk buildings into housing for senior citizens on fixed incomes.
During the council’s Nov. 28, 2011, meeting, Landex Companies presented the proposal to convert the downtown buildings into 35 one-bedroom apartments and 24 two-bedroom apartments. If built, the project would provide housing for people at least 62 years old who have a fixed income of around $25,000 or less annually. Landex spokesman David Johnson provided an update on the proposed project Monday.
The council indicated it was not satisfied with the project’s financial components. Some council members indicated that using those buildings for low-income housing is not the best use of those buildings. Councilman Doug Mercer said the proposed use is not compatible with the existing plan for downtown/waterfront redevelopment and new development.
Johnson said it would cost about $10 million to build the proposed project. He told the council Landex expected to come up with all but about $1.4 million to cover the cost. Other funding sources, including the city, were considered as possible sources to cover the $1.4 million gap, Johnson said.
The Landex proposal called for the city to provide $75,000 (possibly more, possibly less) toward closing that gap. That $75,000 could be in the form of in-kind services from the city, or the city helping with infrastructure needs related to the project, Johnson said.
The sale of low-income-housing and historic tax credits associated with the proposed project would have generated about $8.4 million for the proposed project, Johnson said. Landex’s further pursuit of the project “hinges” on the sale of the tax credits, Johnson said.
“This whole project is predicated on funding, funding, funding from a number of sources, and every time the question has been asked, it would appear to be that Landex will have no up-front money other than what they have spent to date,” Mercer said. “They’re going to ask the housing authority to borrow $190,000. They’re going to sell tax credits. … They’re going to go for a CDBG grant that the city will have to apply for, and that money will have to flow through the city. Then there’s the NCFHA’s 600 grand, which is federal. They want the city to put in 75 grand. … Landex is not going to have a lot of up-front money involved, and they are going to depend on everyone else for the $10 million.”