Housing Authority awarded $13.5M in tax credits to build next affordable housing project in Steamboat
September 20, 2018
STEAMBOAT SPRINGS — Yampa Valley Housing Authority announced Thursday that it has been awarded $13.5 million in low-income housing tax credits from the Colorado Housing Finance Authority.
The Housing Authority expects to sell those credits to an investor for 95 to 96 cents on the dollar to fund its next affordable housing project: Alpenglow Village.
Housing Authority Executive Director Jason Peasley said earning the award would not have been possible without voter support of Referendum 5A, a 1-mill property tax levy passed in 2017 that funds development of low-income and affordable housing.
“Voters approved a tax so that we could do this exact thing,” Peasley said. “I think that really played well (with CHFA) and helped us with this round — knowing that the community was behind this.”
The Housing Authority pledged $525,000 in mill levy collections to fund the new project, which helped bolster the application.
“We really put together one of the best applications,” said Matt Gillam, vice president of development and partner with Overland Property Group. “We really put our best foot forward. The state really took notice of how well we did in Steamboat Springs, the quality of the product and low cost of construction and demand in the community.”
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Overland is a partner and owner of The Reserves at Steamboat Springs along with the Housing Authority, and the public-private partnership will continue throughout the Alpenglow project.
The federal tax credit program was created in 1986 to incentivize the private sector to build affordable housing. The government issues tax credits to the state, and the state decides which projects get funded.
The Housing Authority also received $11 million in tax credits in 2015, which it then sold to American Express for $13 million. That money was used to build The Reserves, a 48-unit income-restricted apartment complex on Steamboat’s west side.
To earn the tax credits again so soon is a testament to the success of that project, Peasley said.
“I’m not surprised because we have, you know, a great project and an incredibly well-accomplished team that has pulled off a really successful project with The Reserves,” he said.
“The reason why it’s unusual to get these projects is because it’s competitive — it’s a beauty contest at the state level,” Peasley said. “The general wisdom is that they don’t tend to give out tax credit awards on the first try, let alone twice in the span of about three years.”
The Housing Authority was up against 34 projects across the state, and 15 were awarded tax credits. Among those tax credit winners, Alpenglow Village received the maximum award along with three housing projects on the Front Range.
The new project, which will be located at Pine Grove Road and Mid Valley Drive near Walgreens, is expected to provide 72 units for low- to middle-income families by 2020 at a cost of $22 million to $25 million. Of those units, 48 will be for families making 30 to 60 percent of area median income, which is around $54,000, according to the U.S. Census Bureau. Twenty-four will be reserved for those making 60 to 120 percent of area median income.
“The vast majority is that more affordable (range), but there’s a working population in Steamboat that doesn’t really have any housing options at all,” Gillam said about middle-income families. “These are people that, you know, are your teachers and your firefighters and your policemen.
“When we were looking at the demands and the need in the community, it really jumped out at us that this was a hole in the market, and we really needed to address it,” Gillam said.
The next steps for the Housing Authority and Overland are to continue working on the architecture and engineering plans as well as the entitlement process with the city and getting a building permit from Routt County.
“We have our construction and engineering teams standing at the start line and getting ready to move forward,” Gillam said.
The partners hope to choose an investor and banking partner by late this year, close on the sale of the tax credits in mid-March and start construction around April 1, 2019.
“We have a lot of work to do between now and then,” Peasley said.
On Thursday, Peasley took little time to celebrate the award and was looking beyond Alpenglow to continued affordable housing development in the Yampa Valley.
“Our goal is that we will be starting a new project every year after this,” Peasley said. “So this is the first of many projects to come.”