Allied.

January 16, 2008 12:22 pm

Sigh. I don’t think I can sit through another meeting on Allied, but I have one today and there’s one more tomorrow. And every time I think I’ve crossed all my questions off my list, I remember one or two more. While this has been a moving target for months, the last few days things have settled down and here’s where I think we are at.

COSTS PER UNIT
While the initial numbers showed a cost of $184,988 per unit, there are several costs that are not in that number that they need to add. There’s $1.2M in infrastructure costs that aren’t in there, plus $65,000 in rent up reserves and the cost per unit for land should be $8,000 but they had it at $4,592. So, the actual costs for the 49 units in the first phase end up being $214,212 per unit.

COSTS TO THE TAXPAYER
The bill the tax payers are paying adds up like this:
$4,350,000 for the purchase of the Hauk Properties
$377,000 for the two properties on Jenewein
$18,000 for public greenway we’re giving to the project
$3,500,000 for public infrastructure
??? in staff time

That’s about $8.5M once we add the staff costs. We’re going to end up with about 109 units in phase one and phase two. That ends up with a taxpayer subsidy of $75,682 per unit. And in the end, the CDA walks away with nearly a million dollars in profit and the right to sell the land (and make more money) to the non-profits who then have to make phase two affordable. Nice gig if you can get it. Free land, free staff, $75,682 subsidy per unit and they still can’t make the rental units affordable without Section 8 vouchers. Wow. Just wow. That’s alot of resources that more saavy folks could have done a whole lot more with.

FINANCING
Yesterday I finally asked the question about where the Fannie Mae $2.1M loan came into play. Apparently, its what we’re counting on for the $1.8M mortgage that we need to make the project work. Problem is, we only have that line of credit until 2011. Then what? Also, the $8,000 per unit that the CDA is “paying” us for the land is in a deferred note, they don’t have to pay us unless they sell the land at some point in the future.

Also, even thought the City is the backstop for the Fannie Mae loan, we don’t get to see or approve the final financing package.

“AFFORDABLE HOUSING” AND THREE BEDROOMS
We aren’t adding any affordable rental housing, in fact, we are removing it. And we’re removing the disappearing 3-bedroom rentals. 3 bedroom rentals have become increasingly difficult to find while the 1 & 2 bedroom market is being flooded.

Even after spending $8.5M the only way the housing is going to be affordable is by taking 36 Section 8 vouchers out of the community (so, the next 36 vouchers that come back to the CDA will not go back into the community but they will be “stuck” to the units to make them affordable.) And, because HUD allows the landlord to charge more rent money than WHEDA, the CDA ends up with even MORE money. The tenants, however, only pay 30% of their income towards their rent. One has to ask, how are we putting $75,000 into units that still can’t be made affordable?

BAD CHANCES
So, some of the things that need to fall into place here, are some pretty big “ifs”.
1. We have a 1 in 3 chance of getting the WHEDA tax credits that are $6.7M of the $9M in financing that we need.
2. There is a Federal Home loan in the financing, but they only have half as much money as they had last year.
3. HUD (Washington) has to approve allowing us to take 36 vouchers and “stick” them to this project. That is only a 10 year agreement which can be renewed for 5 more years, but the housing has to be affordable for 25 or 30 years.
4. They still have to get the land use approvals and there’s ALOT of work to be done to meet some pretty ambitious timelines.

WHERE ARE THE ALDERS?
Several alders wanted a briefing on the project, 12 said they’d show up, but only Solomon, Rhodes-Conway, Webber, Rummel, Bruer, Compton and myself showed up. They didn’t even bother doing the presentation since we all have seen some version of it. Jed was on the radio (and also not at Board of Estimates on Monday either) talking about the project when I drove to the yesterday’s briefing even though he hasn’t seen the presentation and details which only recently became available on-line. Note: I’d expect at least one more version of the resolution, since the substitute doesn’t take into consideration the changes the Plan Commission made.

And where are those alders who haven’t been to any of the meetings like Brandon, Skidmore, Palm, Clausius (he’ll be absent from the meeting where we vote). Also, some only got an odd snapshot of the project depending upon what meeting they went to Judge (terrible housing meeting), Cnare and Gruber (essentially only looked at planning issues), Schumacher and Pham-Remmele only came to the community meetings early on when the most important information wasn’t yet available.

So, its coming to decision time and I have no idea how I am going to vote. Alder Solomon has made this better with the help of CDA chair Stuart Levitan, but I’m not sure we are there yet. I can’t see

spending this much money ($75,000 per unit)
at this high of a per unit cost ($214,000) and
letting the CDA walk away with a profit off of the people of Allied Drive while
sticking the non-profits with meeting the affordability goals the CDA set while
charging non-profits for land that CDA got for free when
the CDA doesn’t plan to reimburse the City for staffing and infrastructure costs and
the CDA does not plan to build more 3 bedroom rentals while
raiding the section 8 program.