Affordable housing project to partner with Grand after Fraser withdraws
After Fraser’s Housing Authority withdrew from its partnership in an affordable housing project, the developer is looking to work with the county.
The plan calls for the Mill Avenue Apartments to be a low-income housing project with 60 apartments restricted to the local workforce. The units will require that tenants earn 20-80% of the area median income, equal to $15,760 to $63,040 per year in a four-person household.
The project, expected to be completed in 2022, will be built with a 9% Low Income Housing Tax Credit, according to a letter from developer Clark Lipscomb to the Fraser Housing Authority dated May 5.
In that letter, Lipscomb offered the Fraser Housing Authority a limited partnership in the project. In return, Fraser would receive a one-time payment of $10,000 to cover costs associated with joining the project.
The Fraser Housing Authority, which is made up by the Fraser Board of Trustees, authorized moving forward with the agreement June 3.
On Sept. 10, Grand County Housing Authority Director Sheena Darland sent a letter to Fraser pointing out that the Mill Avenue Apartments would be built on county land adjacent to town.
“As you know, state law requires that, for a housing authority to engage in projects outside the authority’s boundaries, the housing authority must enter into a cooperative agreement with the housing authority having jurisdiction over the area,” the letter said.
Darland went on to suggest a meeting with Fraser to discuss a potential cooperative agreement for the project.
However, following an executive session Sept. 30, the Fraser Housing Authority unanimously voted to withdraw from further negotiations citing the letter and the county’s jurisdiction.
Lipscomb approached Grand County commissioners, who act as the housing authority’s board, on Oct. 20 to discuss this sudden change as he faced pressing deadlines in November related to the tax credits. He asked the county’s housing authority to fill the gap left by Fraser’s.
While the CHFA tax credits do not require a local housing authority partner with the developer, Lipscomb explained that the bank financing the project guaranteed the deal with the Fraser Housing Authority as a partner. He said the underwriting would be negated without a housing authority involved on those terms.
Lipscomb wanted to keep the potential deal with the county the same as it was with Fraser, but commissioners insisted on negotiating certain terms. The highest point of contention was around the yearly payment the developer would make to the Grand County Housing Authority in return for the partnership.
The county asked for $5,000 a year, but Lipscomb said that $1,000 would be the most this project could afford. The county countered with $2,500 with Darland emphasizing at the Nov. 10 meeting that this would act as “feed money” for other affordable housing projects.
While the commissioners argued the cut was generous, Lipscomb emphasized his thin margins for the project. He said that large affordable housing projects have been lacking in Grand due those financial constraints.
“I don’t know of any private developers knocking down the doors to go build projects like this in Grand County,” Lipscomb said.
Following extensive negotiations with Grand County, both parties agreed to a $20,000 exit fee and a $10,000 one-time payment to the Grand County Housing Authority to include up to $7,500 in legal fees. An additional $2,000 per year will be paid to the housing authority.
While the hope was to approve the agreement Tuesday, the topic was not on the commissioner’s agenda. Darland said that the county’s housing authority is still working with the developer and that she hoped it would be brought to the Housing Authority Board next week.
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