Earlier this year, the Penacook tannery apartment project’s financial future remained uncertain.
The developer, the Caleb Group, had been denied low-income housing tax credits during its first application to the state’s Finance Authority.
Those credits, which encourage the development of affordable multi-family units, are critical to the Caleb Group’s plan – 75 percent of their funding is expected to come from federal financing, and it won’t close on the site until funding is secured. The rest of the money is expected to come from private loans.
To give you a sense of how much money that is, the estimated costs of completing the first 34 apartments, known as Penacook Landing, have checked in at $8.6 million.
It seems their gambit has paid off; after being denied the first time around, the developer was awarded $714,000 worth of credits this week from the Financing Authority, which translates to $5.95 million for the project.
Combine that with the $500,000 worth of community development block grants Concord was granted on the developer’s behalf by the state’s Community Development Finance Authority, and it seems like this project is finally getting off the ground.
The first time around, Caleb was told their project – 54 mostly low-income apartments worth of multigenerational housing at 35 Canal St. – violated federal funding regulations, and they had to make a choice: either go with the less valuable and less prioritized age-restricted housing or cement the apartments as being multigenerational.
Caleb went with the former, promising the project would still be marketed toward seniors and not bring more children to the district, a big concern several residents had about the project.
Despite that, the project scored an 88, the third-lowest score out of 13 prospective projects.
It’s worth noting the tax credit application process is notoriously competitive, with criteria based on the completeness of the project, whether it’s non-age restricted and if has a certain number of apartments renting at or below 50 percent of the region’s average median income. Caleb’s project scored well in those categories the last time around.
This time they scored much better, albeit in a smaller field: Penacook Landing was awarded 104 points and landed squarely in the middle of a field of nine, according to the Finance Authority’s website. The project was propelled by having more secured funding and less age-restricted housing. Having all of its permits in hand and a walkable location doesn’t seem to have hurt, either.
City leadership is thrilled. After all, getting someone to take a chance on a former brownfield site has been a decades-long haul, and Concord had to use mostly federal and state funding to clean it up.
“Quality, affordable housing is tremendously important for the City of Concord, especially given the very tight rental housing market,” Mayor Jim Bouley stated in a city press release. “At full build-out, this transformative project will create 54 units of much needed, high quality affordable housing units. It will grow the City’s tax base, and rid the City of a prominent blight in the heart of Penacook Village.”
But one of the project’s biggest critics, Allan Herschlag, continues to be skeptical. In an email chain to Ward 2 residents, he says the project’s lack of a commercial component and its location in a tax-increment finance district, aren’t what Penacook needs.
“True tax base expansion should not come at the cost of neglecting the importance of tax rate stabilization,” Herschlag writes. “It isn’t fair that some projects in special tax districts are able to direct all their new property taxes to pay for the improvements that made their projects possible, at the expense of paying their fair share for community-wide costs and services.”
Regardless of how one might feel about Penacook Landing, securing the funding is the last piece the Caleb Group needed to make it happen. According to the city’s press release, demolition of the tannery will take place in the spring, followed by the sale of the site to the Caleb Group.
Phase I is expected to be completed in early 2020, with Phase II following in 2021. That, of course, is dependent on funding.
(Caitlin Andrews can be reached at 369-3309 and can drews@cmonitor.com)