AFFORDABLE-HOUSING PROJECT TO BEGIN

Construction of a 15-unit affordable-housing project will begin Monday at the site of one of the units, officials announced Friday. A groundbreaking will be at 10 a.m. with developers, investors and local and state officials participating.

Site of the ground-breaking will be a vacant lot at 1025 Good Hope, where one of the first five homes are to be built possibly by the end of the year.

All 15 sites will be in that area, said Bob Robins of Union Electric Co., a major investor in the project.

Construction of the first five 1,000-square-foot, three-bedroom homes will begin Monday, Robins said. He said it is hoped that the five homes will be completed before bad weather sets in. The other 10 homes will be built in 1997.

The units will be built on scattered vacant lots in southeast Cape Girardeau. The houses will be rented to low- and moderate-income tenants. A family of five could qualify if annual income doesn't exceed $23,500.

The houses will rent for $375 a month.

"It's going to be beneficial to the community," said Mayor Al Spradling III, who will be at the groundbreaking. "Any time we can get private development of affordable housing, people will benefit.

"We need additional housing and we need affordable housing, and this is a positive step in the right direction."

"We keep hearing people say there's not any entry level housing, and this will provide that for the community," Robins said. "It's kind of a win-win situation for everybody."

Government tax credits, a low-interest loan and private investment will be used to fund the $1.2 million project. The development is called Southeast Properties.

Chuck Moutell, Southeast Properties president and owner of Moutell Construction Development and Housing Missouri, a statewide tax-credit financing vehicle, are partners in the project. Housing Missouri owns 99 percent of the project and Moutell the other 1 percent.

The Missouri Housing Development Commission approved funding for 22 statewide projects in April, including the Cape Girardeau development. The projects were chosen from among 75 applications.

The commission allocated $4.6 million of the $6.5 million in tax credits it had to work with this year.

The project will be financed with a loan of $477,100 at 1 percent interest for 40 years to be leveraged with federal and state housing tax credits.

Southeast Properties will receive federal and state tax credits of $174,567 annually for 10 years. Private investment through Housing Missouri is expected to provide $941,000 over six years.

Housing Missouri has helped build more than 35 affordable homes since it was created in 1995. Last year it had $1.7 million in private investment from seven businesses and hopes to raise that much or more this year.

Currently, there are about 10 corporate investors from the banking, utility and insurance industries. Besides Union Electric, the major investors are St. Joseph Power and Light, Mark Twain Bank, General American Life, Roosevelt Bank and Boatmen's Bank.

Moutell said the houses must remain rental property for at least 15 years. After 15 years the houses could be sold to tenants, he said.

Others attending the groundbreaking will be Timothy D. Barry, president of Missouri Housing; Mitch Robinson, executive director of the Cape Girardeau Area Industrial Recruitment Association; John Mehner, president of the Cape Girardeau Chamber of Commerce; Doug Groesbeck, UE district manager; and a representative from the Missouri Development Commission.