By Ariella Cohen, The Lens staff writer |
A $651 million redevelopment of the Iberville public-housing complex will be paid for with loans from the state, government-backed bonds and money from selling low-income housing tax credits, Housing Authority of New Orleans plans show.
First submitted to the U.S. Department of Housing and Urban Development in the fall as part of an application for a federal Choice Neighborhoods grant, these plans gained new relevance Wednesday when HANO chief David Gilmore gave a first unequivocal commitment to redeveloping Iberville whether or not the federal government provides the sought-after $62 million grant.
“I am committed to the redevelopment of Iberville with or without” the Choice Neighborhoods grant, Gilmore said in a radio interview with WBOK-AM talk show host Gerod Stevens.
In the past, Gilmore has stopped short of framing the redevelopment of Iberville as inevitable. That reticence made sense given that when HANO began work on an Iberville makeover, two of the four public housing complexes HANO closed for redevelopment after Hurricane Katrina had not secured financing. In January, that changed when Gilmore joined affordable-housing advocates and state officials in successfully lobbying Congress for an extension for Gulf Opportunity tax credits. The one-year extension won in Washington allowed two of the authority’s other public housing redevelopments — Lafitte and BW Cooper— to move forward after years of uncertainty caused by the developers’ difficulties securing buyers for tax credits. The extension gave the projects developers’ more time to close on deals with investors.
“If that hadn’t happened, $37 million in tax credit would have been lost and frankly, BW Cooper never would have happened and Lafitte would have been seriously jeopardized,” Gilmore said Wednesday.
Apparently emboldened by that victory, Gilmore is ready to take on a new financing challenge – and a big one. Iberville likely will cost more per unit than other public housing developments due to the sensitivity of its historic site just outside the French Quarter, early plans show.
While the exact mix of government subsidies and private equity needed to rebuild Iberville hasn’t yet been determined, the redevelopment will depend in large part on selling the same low-income and historic renovation tax credits upon which Lafitte and Cooper depended.
More than half of the money for Iberville’s first phase — a $42 million rehab of 20 historic buildings containing 140 units on Marais Street — is projected to come from the sale of historic renovation and low-income housing tax credits, the financing plan shows.
New Orleans real estate attorney Kelly Longwell said that Iberville is better positioned to finance its project now than earlier project developers who were caught smack dab in the middle of the housing crisis and a resulting tax-credit “hurricane,” she said.
“Two years ago, the only places that were attracting investors were New York, California and big cities in Texas,” said Longwell, an adviser on tax-credit deals and secretary of the Louisiana Association of Affordable Housing Providers.
Longwell says that the market, while still not back to its pre-crisis levels, is on the rise.
“We didn’t have any investors for two years. Now we have a few that are on the market,” she said.
HANO’s chosen developers for Iberville are River Garden developer HRI and McCormack Baron Salazar, a St. Louis company that just joined the BW Cooper development team after making a name locally developing CJ Peete’s replacement, Harmony Oaks. They share significant experience completing tax-credit-financed projects. Both also have relied on instruments such as tax-increment financing and payments in lieu of taxes that divert local tax revenue into project development.
HANO could not comment on whether the development team will pursue either tool this time around. In addition to using tax credits and borrowing from the state, HANO will kick in $1.5 million from its accounts.
A schedule included in project plans submitted in the fall anticipates that all 821 units included in the project will be built by 2018.