SHARON Authority rejects loan for project

The authority refused to make one loan but approved a second.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The Mercer County Housing Authority won't put up a $339,000 loan to help finance phase two of its Hope VI housing development in Farrell.
The authority rejected a request for the loan Wednesday from Falbo-Penrose of Pittsburgh, the project developer.
Phase two involves the construction of 34 scattered-site public housing units that are to be built on land outside the original Steel City Terrace apartment complex boundaries at an estimated cost of $7.3 million.
Bridge loan
Falbo-Penrose sought the loan from the authority to provide interim or "bridge" financing while it applies for tax credits through the Pennsylvania Housing Finance Agency.
Tax credits allotted to the project can then be sold to banks and other institutions who need the tax write-offs they provide.
L. DeWitt Boosel, authority executive director, said the authority would be able only to take the $339,000 from its capital improvement fund, a pool of federal money allotted to the authority each year to make improvements to its housing units.
There's only $1.1 million in that fund right now, and that money is needed in areas other than Hope VI, Boosel said.
Reason for request
The developer wants the money to cover the anticipated $180,000 cost of building one three-bedroom unit and one four-bedroom handicapped-accessible unit as part of the project, something the authority is insisting be done, Boosel said.
The remaining $159,000 is cost overruns, he said.
Boosel suggested to his board that the handicapped-accessible apartment issue could be addressed later.
As for the $159,000, Falbo-Penrose might want to consider fronting that money itself or taking it out of its estimated $450,000 developer's fee for phase two, he said.
The matter will be worked out, but the authority won't be making the loan, Boosel said.
The project
HOPE VI will replace the old barracks-style Steel City Terrace complex on Spearman Avenue in Farrell with a more community-oriented housing complex that has apartments in groups of three or four per building.
It has an overall $30 million price tag, partly underwritten by a $9 million federal HOPE VI grant.
The name Steel City has been replaced with Centennial Place.
In other business, the authority voted to take $206,148 from its federal Section 8 Elderly Housing account as interim financing for its plans to build 10 units of senior citizen apartments at Maple and West Butler streets in Mercer.
That project has an estimated $1 million cost and will be next to a 10-apartment complex already built by the authority.
All of those units were rented within 30 days, and the authority has a 15-person waiting list, Boosel said, citing the need for the additional 10 apartments.
The loan is to be repaid by PHFA tax credits the authority hopes to secure for the project, he said.
gwin@vindy.com