HERMITAGE Housing authority declines bond issue
The apartment complex comes with a price tag estimated at $6 million.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
HERMITAGE, Pa. -- The Mercer County Housing Authority has scrapped plans to borrow money through a bond issue to build a 60-unit apartment complex for senior citizens at Lamor and North Keel Ridge roads.
The problem with borrowing the money, even through a tax-free bond issue, is that the principal must still be repaid, said L. DeWitt Boosel, executive director.
What the plan is
The plan now is to ask the Pennsylvania Housing Finance Agency (PHFA) for low-income tax credits that the authority can sell to a bank or other financial entity that can use those credits to reduce its own tax bill, Boosel said.
The apartment complex got its final approval Wednesday from the city commissioners, who OK'd the development design that will feature five apartments in each of 12 buildings. The buildings will be arranged in an oval around a center green, a community building and a gazebo.
There will be 30 one-bedroom and 30 two-bedroom units.
The city has made a financial commitment to assist in the development and will put about $400,000 into the project to help pay for the 20-acre site and some site improvement work, Boosel said.
The authority will kick in $187,000 and will ask the Federal Home Loan Bank for $200,000 to $300,000 more, he said.
That means PHFA will be asked for about $5 million in tax credits, Boosel said.
Preparations
The current application period for PHFA assistance expires Oct. 12, and Boosel said the authority can't have its package ready by that date. That means it must wait until the next funding period in March 2004, he said.
There are still some environmental studies on the site that must be completed, Boosel said, adding that he doesn't anticipate any problem because the property has always been farmland and no hazardous materials should be found there.
If all of the funding can be arranged, construction would start in late summer or early fall 2004 and be completed some time in 2005, he said.
The authority will probably rent out the units as each building is finished rather than wait for the entire project to be completed first, he said.