Investment

City to consider $1.2 million loan for downtown apartment project

At their Aug. 16 meeting, City Commissioners will consider a request for $1.2 million in Community Development Block Grant funds for a proposed rental housing project.

The funds are part of the city’s housing rehabilitation loan program that uses CDBG funds and offers interest-free loans to low-income residents and affordable and low-income landlords who housing units to make necessary upgrades to their properties.

The Great Falls project is among those invited to apply for housing tax credits

About a year ago, Dan Bateman approached the city about a proposal to renovate the former Cambridge Court assisted living facility at 1109 6th Ave. N. to be apartments.

Bateman recently purchased the property and is proposing to turn the vacant five-story, 90-unit building on 1.26 acres into 50 apartments with 23 two-bedrooms and the other 27 as one-bedrooms, according to city ​​staff report.

Demand for new housing high in Great Falls area; cost slow progress

The building was built in 1929 and is zoned as multi-family, high density.

Cambridge Court closed in 2018 and the building has been vacant since then. The property began to fall into disrepair, according to the city.

The city approved the plan for $1 million in federal housing funds

The new apartments will range in price from $652 to $999 per month, according to Bateman’s application.

His major investments, according to a city staff report, include:

  • installation of a fire alarm system: $83,251
  • installation of fire sprinklers: $420,227
  • installing new windows: $231,851
  • new water and sewer service line: $75,000
  • elevator test: $10,000
  • electrical service to apartment units: $250,000

“Given the significant expense that would be required to renovate the vacant building along with the applicant’s willingness to offer some affordable rental units, staff believe the project is a perfect fit for the city’s rental improvement loan program,” according to city ​​staff report. .

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Additional loan program requirements include:

  • the landlord cannot displace any existing tenant;
  • 51 percent of tenants must meet income requirements;
  • rents for units being rehabilitated must be affordable to lower income tenants following HUD Section 8 rent determination guidelines and must remain affordable for 2 years;
  • the property must remain a residential housing unit for the life of the loan;
  • lease loans require monthly payment initiation after substantial completion of the project;
  • the rental property must be financially sound. (Otherwise, landlord income verification may be requested)

The program’s minimum loan amount is $10,000 and $25,000 is the maximum loan per unit or $100,000 per project.

Applications over $100,000 may be reviewed; and other requirements may apply, including City Commission approval.

The city is requesting CDBG funds to convert the baby pool into a splash pad at the water park

City staff is recommending approval of the loan request, which will not exceed $1.2 million, because the projects meet several city goals including renovating a “notable, historic building; providing much needed rental housing; responding to a blighted property; and increasing the community’s affordable housing stock,” according to the staff report.

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The city’s revolving loan fund currently has a balance of about $1.4 million and “staff is looking for a possible catalyst project that will both reduce the city’s current balance and provide a significant impact to the community,” according to the staff report. .

The revolving loan fund can still accept requests for emergency loans and rental and homeowner program funds, according to city staff.

Since it’s a loan, the funds go back to the city to be used for more affordable housing projects.

The city planning and community development program administers the loan as part of its CDBG program.

“The loans have made a huge impact on the community, acting as an incentive for both homeowners and landowners to renovate older homes and apartment units for affordable housing. In particular, the program has been successful in allowing downtown building owners to activate the upper floors of their buildings for affordable rental units,” according to the city.