Apartment project receives tax credits

It took multiple tries, but a project to rehabilitate a Brownstown apartment complex will move forward after receiving nearly $600,000 in federal rental housing tax credits.

Ohio-based Buckeye Community Hope Foundation was successful in its most recent application to the Indiana Housing and Community Development Authority in obtaining the credits, which are made available to provide affordable housing in Hoosier communities.

Lt. Gov. Sue Ellspermann announced the fund recipients late last week.

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Country Apartments, located at 600 N. High St., are government-subsidized housing for low-income renters. There are seven apartment buildings for a total of 56 two- and three-bedroom units. The complex was built in 1981, with the first tenants moving in in 1982.

The renovation project is expected to cost just slightly more than $8 million. Each unit will receive $10,483 in tax credits for a total of $587,067.

Renovations will include interior and exterior improvements, such as new siding and roofs, energy-efficient lighting and appliances, new windows, doors, cabinets and insulation, improved security, sewer repairs and landscaping. All areas will be made handicapped accessible, including sidewalks, parking lots and the playground.

Ian Maute, vice president of development for Buckeye, said it’s difficult to determine when construction will begin, but he hopes by next spring.

“Construction should take roughly 12 months to complete once it begins,” he said. “We anticipate being done in the first part of 2018.”

Current tenants will have to temporarily relocate to another unit while their apartment is being worked on, Maute added.

“We don’t anticipate anyone having to relocate off the property,” he said. “When completed, the tenants will have brand-new units with modern amenities.”

The Brownstown property is operated by RLJ Management, also based out of Ohio.

Although the construction will be completed by Buckeye’s general contractor, Maute said the company will solicit bids from local subcontractors and suppliers.

A total of $14.3 million was awarded to 18 projects across the state. Those include new construction, rehabilitation, converting existing structures and the preservation of historic buildings. The 2016 allocation will fund work to more than 800 housing units total.

The tax credits provide incentives for private developers, such as Buckeye, to further the affordable housing choices available in the state.

“Rental Housing Tax Credits are one of the most important tools we have to encourage the production of affordable housing,” said Ellspermann, who chairs the IHCDA. “The 18 new projects will contribute greatly to the overall development and stabilization efforts of these communities.”

Maute said it’s important to preserve Country Apartments as an affordable housing option in Brownstown.

“Having essentially a new, high-quality apartment complex in town will be a benefit to the surrounding community,” he said.

Brownstown Town Council President John Nolting said he was excited to hear the news.

“I think the people who live in those apartments and in that area will be happy to see any work to make improvements happen,” he said.

Although the town gave verbal support to the project, it has not had to make any financial contributions.

The state received a total of 50 applications this past November requesting around $42 million in rental housing tax credits and an additional $16.1 million in supplemental IHCDA funding, making the program highly competitive.

Developers sell the credits to investors to raise capital or equity for their projects, reducing the amount the developer would have to borrow. Because the debt is lower, a tax credit property in turn can offer lower, more affordable rents.

Buckeye Community Hope Foundation has attempted to obtain federal tax credits for the project in the past and was successful in 2009, but they were unable to sell the credits because of the recession.

It has been involved with the Brownstown property since 2003.