A developer has turned down an already-approved loan for a Winchester Avenue development project, freeing up New Haven’s housing authority to fast-track plans to rebuild rundown apartments in West Rock and Fair Haven.
The developer, Ohio-based Forest City, plans to convert an old Winchester rifle factory into 158 apartments. It had received permission to borrow $39.1 million in tax-exempt bonds to finance the $50 million project. The bonds were approved by the state and would be issued through New Haven’s housing authority. The housing authority planned to sign a deal with Forest City to issue 35-year housing revenue bonds and lend the proceeds to Forest City to finance its project.
However, they were racing against the clock: the state required the housing authority to sign its deal with Forest City and issue the bonds, by Dec. 31. “Based on where we are with our architectural drawings,” the paperwork wasn’t going to be ready in time, said Abe Naparstek, vice-president for East Coast development at Forest City.
“The bond had to be placed by the end of the calendar year, and we couldn’t meet that deadline. So we decided [the housing authority] could use it for another project,” he said.
The housing authority voted at its monthly meeting last week to use the money instead to tear down and rebuild Farnam Courts in Fair Haven and the Abraham Ribicoff Cottages in West Rock. Those plans are further along than Forest City’s.
Naparstek said his $50 million project, dubbed the Winchester Lofts, won’t be delayed. Forest City will take out private loans instead of state bonds to finance the deal. The developer also secured $4 million in state grants.
Naparstek said the plans for the Lofts (pictured) remain the same, with 20 percent of the apartments reserved as “affordable housing.” The definition of “affordable” will change slightly, however.
With the state bond deal, the rents had to be capped for people making up to 50 percent of Area Median Income (AMI). AMI in the New Haven area is $84,900. The income limits are set annually by the federal Office of Housing and Urban Development.
Forest City’s revised plans raise the rents, such that they’re tied to higher income levels: 10 percent of the apartments will be set aside for tenants making 60 percent of AMI. The rent would be about $850 a month for a one-bedroom apartment, according to Naparstek. Another 10 percent of apartments would be reserved for tenants making up to 100 percent of AMI. A one-bedroom apartment for someone in that income range would go for $1,450 a month.
Naparstek conceded that final 10 percent is more like “workforce housing” rather than “affordable housing.” But it’s still pretty affordable, he reasoned: “Your average renter of a luxury apartment in New Haven is probably at 200 percent AMI.” A comparable market rent for a one-bedroom luxury apartment would be $1,800, Naparstek estimated.
Onward Farnam, Ribicoff
Forest City’s change of plans speeds the way forward for two projects the housing authority has in the hopper.
One is the plan to tear down Farnam Courts, the World Ward II-era, 244-unit housing complex at Grand Avenue and Hamilton Street. The housing authority struck out on a $30 million federal grant to finance the project, but is proceeding anyway.
The plan has two components: Build a larger, mixed-income complex at the current site of Farnam Courts. And convert the old Cott soda factory at Chatham and Ferry Street into homes, as well as build more housing at Eastview Terrace, to accommodate displaced families. The housing authority voted Tuesday to use some of the freed-up bonding, $32 million, for the first of those two projects.
Funding is now in place to tear down and rebuild Farnam Courts. Construction is slated to begin in October 2013, and doors open in January 2014.
It voted to use the rest of the money for to raze and redo the Abraham Ribicoff Cottages, an isolated elderly complex way on the outskirts of West Rock, adjacent to the reborn Brookside complex. Full funding is contingent on winning competitive Connecticut Housing Finance Authority tax credits in January. If all goes as planned, construction would begin in August 2013, and Ribicoff neighbors could return to rebuilt homes in November 2014.