After an extensive tour of the project’s new occupied, speculative and rental homes on Pine, Florence and 11th streets in the Heritage Pine development, members praised the quality of the construction, intended to transform the areas to newfound glory.
Funded in part through a 50-year, $750,000 yearly allocation of excise taxes charged on hotel and motel rooms, project funding is overseen by the URA, which changed from a largely absent, hands-off board to an active one when city commissioners extended the board’s jurisdiction to several downtown sites eyed for development and replaced its resigning members with former Mayor Bob Young, downtown activist Brad Owens, businesswoman Bonnie Ruben, Libertarian party official Amanda Bryant and citizen Isaac McKinney, who did not attend Thursday.
Issuing $8 million in bonds against future tax collections, the project since 2010 has spent $7.3 million in bond proceeds, $2.5 million in federal funds, $1 million in other local public funds and seen $2.5 million in private investment, according to a June monthly status report.
The funds have resulted in the purchase of 274 lots and demolition of 101 blighted properties, and the construction of 24 homes, 22 of which have sold (with 6 more under construction), as well as the construction of 24 new rental units, the report said.
While the project continues to receive $750,000 annually, $550,000 goes toward servicing the bonds and it is effectively out of sufficient cash to continue momentum until its next bonding opportunity next year, prompting city Housing and Community Development Director Chester Wheeler, who serves as project manager, to call for a $2.5 million “bridge loan” to keep it going and repay from the next bond issue next year.
“We didn’t know we would sell houses as fast as we have,” said Wheeler, attributing the cash shortage to the popularity of the new development.
About 30 percent of the funds have gone to consultants APD Planning and Development, which has received about $550,000 a year for its services since January 2010, and Melaver McIntosh, which has garnered approximately $90,000 annually since February 2011. Thirty-eight percent went toward property acquisition, and 32 percent for demolition, construction of the new homes and infrastructure, such as rear access roads behind the Pine Street homes.
Owens, who requested Wheeler provide him a list of 24 “development partners” whom Wheeler said had been procured at the start of the project, and descriptions of what each does, said after extensive discussion Thursday his chief concern about repaying the $2.5 million loan had been addressed and motioned to approve it. After the tour, “we can’t not want to see the project move forward,” he said.
Young, a former U.S. Housing and Urban Development regional director, pressed Wheeler on why he hadn’t begun replacing consultants with city staff, a recommendation made by the American Planning Association in a review, and when private developers would lessen the burden on taxpayers, who presently supply at least $4 to each private $1 spent.
While Wheeler’s budget for spending the loan funds did not mention city staffing, he said he’d written a job description for a project manager.
Young said despite the information provided Thursday, other details including program income and how it was spent, the amount budgeted for homeowner assistance and evidence of significant private investment were absent.
“These are all things we need to talk about moving forward,” he said. “What I’ve seen just hasn’t lived up to all the hype. I’d love to see it live up to the hype.”