Housing developers in race for tax credits

Sunday, November 5, 2006

There are seven low-income projects in the area but only three allotments of credits.


Southeast Missourian

Four developers proposing seven low-income housing projects in Cape Girardeau, Perryville and Scott City are jockeying for three slots that will make millions available to them in state and federal tax credits and low-interest loans.

If they don't get the tax credits, the developers say, the projects won't happen.

"This is what we do for a living," said Kent Heckaman, vice president of Sterling Development in Mishawaka, Ind., which wants to put 36 duplexes on Silver Springs Road and Spruce Street in Cape Girardeau. "We need the tax credits to make the project work."

The Missouri Housing Development Commission is holding public hearings at four locations across the state over four nights to discuss the 114 proposals statewide. Hearings are planned for Springfield, Kansas City and Columbia. The commission generally grants one funding request per community in smaller towns.

The Southeast Missouri proposals will be held in St. Louis on Nov. 15, and the commission is expected to decide at its Dec. 15 meeting which proposals will get state and federal tax credits and/or low-interest loans and state grants.

Four projects have been proposed for Cape Girardeau, two for Perryville and one for Scott City. The projects are either duplexes or apartments, with rents that would range from about $310 for one bedroom to $350 for two bedrooms. All would be new construction, except Scott City's, which would be a rehab project on an existing building.

At the public hearing, the commission hears from the public and developers, said commission spokesman Daniel McKim.

"It gives the public the chance to show support or tell the commission they don't want it," McKim said.

The commission is made up the governor, lieutenant governor, state treasurer, attorney general and six appointees who are generally bankers and business owners, he said.

McKim said about $22 million is available in state and federal tax credits, $4.9 from a commission fund balance, and $11.5 million in the HOME low-interest loan program.

The projects proposed for this area are diverse. Rick Pierce, vice president at Phillips Development Corp., said his company is proposing garden-style apartments that would be similar to other projects it has done in Cape Girardeau -- Fort Hope and Napa Ridge.

Autumnwood would be four buildings near the corner of Hackberry and Benton streets that include 32 apartments with rents ranging from $310 for one bedroom to $575 for four bedrooms. The project on 2.4 acres would cost about $4.1 million to develop.

So Phillips Development Corp. is asking for $662,530 in state and federal tax credits.

"These types of developments are pretty unique," he said. "Without the equity provided by the credits, it would not be feasible to build and maintain those rents."

If Phillips Development Corp.'s proposal is selected, construction would start next summer and end about a year later, Pierce said.

'A tremendous need'

Heckaman, who has the Village at Silver Springs duplex project proposal for Silver Springs Road, said this would be his company's first venture into Missouri.

"But I'm aware there's a tremendous need for more affordable housing for families," he said.

Rents at the Village at Silver Springs would be $485 for two bedrooms and $520 a month for three bedrooms. The duplexes would be built on nine acres and cost $8.4 million to develop.

Developer Chad Hartle of Jackson, who recently pulled his proposal for Victorian Estates in Cape Girardeau because of neighborhood opposition, still has two proposals before the commission -- one in Cape Girardeau and one in Perryville.

Rents at the proposed River Heritage Apartments on Walker Street in Cape Girardeau would be $347 a month for two bedrooms. His Breezeway Estates in Perryville would cost $395 for three bedrooms. Hartle could not be reached to provide further details.

MACO Development Co. of Clarkton, Mo., is proposing three projects -- one in Scott City, one in Perryville and one in Cape Girardeau. All of the projects would be for the elderly. Scott City II apartments, which would be a rehab apartment project, would have rents of $325 to $355 for one-bedroom apartments. Sycamore Village Apartments in Perryville would be 36 two-bedroom apartments that would rent for $405 a month.

West Court Manor Apartments in Cape Girardeau on Brenda Kay Court would be 34 two-bedroom apartments that would rent for $390 a month.


335-6611, extension 137

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