Finance Authority approves apartment complex constructionConstruction expected to take 12 months
It was late Wednesday morning when Washington City Administrator Brent Hinson learned that the Overland Group had received the federal assistance needed to proceed with an apartment complex in Washington.
According to a press release from the Iowa Finance Authority (IFA), the project — titled The Reserves at Briarwood — will receive a $999,000 HOME award and a $389,355 tax credit. Hinson explained that the tax credit was a yearly credit the group would receive for 15 years. In all, Overland plans to invest about $5.8 million in the construction of the 32-unit, two-building complex in the 900 block of West Monroe Street in Washington.
“It is a similar project to the Woodridge Development that was put in during the mid-1990s,” Hinson said. “It will be a good project and give us some good new apartments in town.”
Overland partner Brett Johnson explained that these Federal Low Income Housing Tax Credits (LIHTC) are part of a program the Internal revenue Service initiated in 1986. In Iowa, the IFA administers the program. Johnson said that the credits are highly competitive and reward applicants that select areas that demonstrate a strong need for housing and are willing to meet scoring criteria. This criteria includes income, disabilities, providing energy efficiency, and construction materials.
After hearing a presentation in November from Johnson, the Washington City Council approved providing about $350,000 of Tax Increment Finance (TIF) funding — a 6 percent match — during its Dec. 4 meeting. The city funding was necessary for Overland, a Kansas-based development firm, to receive the credit needed for the state to make its decision on funding for the project. Several council members commented that the project is the type of construction that the Washington Comprehensive Plan states the city should attempt to secure.
“Now that we have received notification of award from IFA, our firm will begin working on the due diligence with our lender, tax credit investors, city planning, architect etc.,” Johnson said. “We will also begin working with our contractor pool to finalize their bid package. This process typically takes 69-90 days. For example, last year we closed on the construction loans for Storm Lake and Pella in July and August and began construction immediately after. The timeline to complete the Washington development is estimated at 12 months.”
The Reserves at Briarwood will include two identical 16-unit buildings and a clubhouse. The buildings will contain two-, three- and four-bedroom apartments. Each residential building will be approximately 18,000 square feet and the clubhouse approximately 1,700 square feet. The Reserves at Briarwood will benefit extremely low income to low income households for an initial period of at least 15 years and an extended use period of an additional 15 years. The project’s location allows easy access for residents to many services needed for daily living. The site is in proximity to a full-service grocery store, the Washington Public Library, a community college, and several elementary, middle, and high schools.
During the initial presentation, Johnson said that Overland was choosing between Washington and Oskaloosa. Due to another project in Knoxville being canceled, Overland had decided to request allocations for both cities. Johnson said in 2013, Overland had also selected two communities — Pella and Storm Lake — to house projects in and both were approved.
“Washington was chosen partially because of its ‘close proximity’ to or new property in Pella and partially because of the strong city leaders, most notably Brent Hinson and Ed Raber,” Johnson said. “Those two gentlemen recruited us very hard and did an excellent job of not only demonstrating what a great community they live and work in but how hard they were willing to work to get this deal done. I cannot emphasize how important that last factor is to a successful application. We develop properties throughout the Midwest and we know first hand the tremendous impact a strong or weak city staff, EDC or commission can have on the success of an application. Outside of the availability and cost of a good site, there aren’t many other factors more important when selecting a community.”