City Beat: Council passes $22M affordable housing plan

Sarah Kerner: The units will be reoccupied by current residents after completion.

Holly Knight: Citywide affordable housing renovations should begin in January.

Abe McGull is urging the Springfield Housing Authority to address the concerns of tenants.

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Springfield City Council on Nov. 2 voted 8-1 in favor of a multimillion-dollar bond issuance for a multisite affordable housing rehabilitation plan.

The decision gives the green light to Keystone Family Homes’ request for up to $22 million in housing revenue bonds through the city of Springfield’s Industrial Development Authority. Keystone Family Homes, a partnership between BGC Advantage LLC and the Springfield Housing Authority, plans to renovate 297 multifamily housing units for low- and moderate-income individuals. The work involves 85 buildings and single-family homes and duplexes scattered across Springfield, according to city documents. Currently, the Housing Authority owns all the properties, which include Glenwood Apartments, 722 E. Glenwood St.; Cedarbrook Apartments, 811 N. Cedarbrook Ave.; and Dogwood Apartments, at West Madison Street and South Campbell Avenue.

Council tabled the request at the Oct. 19 meeting after members of the Springfield Tenants Unite organization raised concerns about the use of the U.S. Department of Housing and Urban Development’s Rental Assistance Demonstration program for the project. RAD gives public housing authorities the ability to leverage public and private debt and equity for the improvement of public housing properties, according to past Springfield Business Journal reporting.

Sarah Kerner, the city’s economic development director, said the units will be reoccupied by current tenants once the rehabilitation is completed. They’ll convert to HUD Section 8 units as part of RAD, she said.

“The city is supportive of safe, affordable, well-maintained housing for all of its citizens,” Kerner said.

While the RAD program will not add any new units of affordable housing, the demand for the category is growing in the Springfield area. According to SBJ’s 2020 Economic Growth Survey, 67% of respondents said affordable single-family housing is most needed for Springfield to remain competitive in the next five years. Another 33% said the same about multifamily housing. Business and community leaders have said affordable housing is a key component to a healthy workforce.

Titus Williams, president of development company Prosperiti Partners LLC, said one reason for the need is that costs have risen, but wages have remained stagnant for those living in affordable housing. For the residential properties in his company’s portfolio, Williams said the cost to renovate destressed homes has gone up leaving him to charge higher rents.

“The cost for construction has gone up significantly,” Williams said. “The inventory of those properties that would be used for affordable housing is getting less and less.”

Council members Abe McGull and Andrew Lear voted in favor of issuing the bonds after previously urging officials at the Housing Authority to address concerns voiced by the Springfield Tenants Unite organization at the Oct. 19 council meeting.

“We are very fortunate to have this come to the city during this COVID-19 because that means we are going to employ people to do these renovations,” McGull said. “I do appreciate the many advocates we have for the tenants to bring to our attention this very important issue. And it sounds like the (Housing Authority) has some work to do in this area.”

Project officials say they’ve been communicative and transparent with tenants since the beginning of the process.

Holly Knight, BGC Advantage’s principal and CEO, said the organizations are meeting with current tenants to sign paperwork and explain the process in case the tenant did not read a previously provided newsletter.

“We have had a lot of public meetings with the residents,” Housing Authority CEO Katrena Wolfram said after the council meeting. “I think we have a good rapport with our residents. Of course, we are always here to answer questions at any time if they can’t make a public hearing or meeting.”

At the Oct. 19 council meeting, however, representatives of Springfield Tenants Unite issued a list of demands including universal design of the properties, transparency in the process and accessible meeting times.

Victoria Altic, an organizer with Springfield Tenants Unite, said the group is asking for transparency about the project to ensure proper appropriation of funds and that a budget is made according to tenant needs, such as handicap accessibility.

“These homes now are not incompatible with what they need – which is a decent quality of life,” Altic said. “But this is a lot of funding. This can really change the quality of life, and we want to make sure it happens.”

Councilperson Craig Hosmer was the lone vote against issuing the bonds. He couldn’t be reached for comment by press time.

Project organizers say the next step is for the city’s Industrial Development Authority to sign off on the plan. If so, Knight said construction would begin in January. The Bolivar Road Apartments near Kearney Street and Kansas Expressway has been selected as a primary site to begin renovations.

Knight said BGC Advantage team members have more than 100 years of cumulative experience with affordable housing – including 65 RAD projects. She said BGC Advantage used a National Association of Home Builders’ calculation to project the renovations would create 481 construction jobs and 19 jobs post-construction, according to past SBJ reporting.

Pocket neighborhood
A pocket neighborhood development years in the works got a tax incentive approval, and developers now say the redevelopment plan on East Cherry Street can be completed by spring.

Council unanimously approved an amendment requested by property owner and development firm Say You Can LLC for a property tax abatement of 100%, up from the previously approved 65% abatement. As a result, the estimated tax savings for the developer is $2,740 a year, according to city officials.

Through Say You Can, co-owners Kelly Byrne and Springfield native and NBA player Anthony Tolliver are building six attached, single-unit homes that will orient around a central courtyard in the Rountree neighborhood. Under the East Cherry Pocket Neighborhood Redevelopment Plan, they’ve demolished two properties at 1361 and 1365 E. Cherry St. Say You Can is a multifamily real estate developer primarily in the senior and student segments.

“It’s important to stress to achieve that abatement we have to prove that this development would never have happened if it weren’t for the abatement,” Byrne said. “In the meantime, for 10 years we pay what the existing property taxes were with annual increases just like everyone else would pay.”

Officials say the abatement increase resulted from a change in city rules. When the redevelopment plan was approved, Kerner said the city restricted abatement levels at 50%-75%. Now that developers can receive 100% tax abatements, Byrne said he and Tolliver are comfortable investing more than the planned $1.4 million for the project.

CARES Act funding
Council voted unanimously in favor of accepting two Coronavirus Aid, Relief, and Economic Security Act grants from the U.S. Department of Treasury and Greene County. The grants are part of the $34.4 million in federal funds that Greene County officials received over the summer.

A $4 million grant goes to the Springfield-Greene County Health Department to reimburse expenses for COVID-19 test kits, supplies, contract tracing, salaries and contract employees. Another grant, $2.17 million, goes to the city of Springfield to fund unbudgeted payroll expense and other COVID-19 expenditures. The fiscal 2021 budget will be amended in the amount of $6.17 million for the purpose of allocating the grants.