St. Petersburg condos fizzled, so it's on to Plan B

Land cleared for condos that never came may become home to affordable housing if developers can find their way through a government financing maze.

Six sites north and west of Mirror Lake were approved last week for city loans contingent on federal tax credits doled out by a state housing program. The developers receiving $3.2-million worth of promises have to score well in a complicated application process and possibly win a lottery to receive those credits, which they'll try to sell to corporations needing writeoffs.

"It is complicated," said Debbie Blinderman, deputy development officer for the Florida Housing Finance Corp., which administers the federal credits. "But we try to make it as easy as possible."

Three of the six sites are along Eighth Street at Third Avenue N, where tenements were razed to make way for CitySide Terrace Homes, a development that fizzled when the condo market went sour. The other three are nearby: in the 300 block of Martin Luther King Jr. N, in the 700 block of Fourth Avenue N, and at 10th Street and Arlington.

Tampa developer 908 Development Group submitted four of the projects, which would entail 275 units at monthly rents ranging from $350 for a one-bedroom to $880 for a three-bedroom. The developer submitted two of these projects last year and received near-perfect scores from the state but did not get funding because of bad lottery draws.

The other two proposals come from Southport Financial Services, a Tacoma, Wash., company with a Clearwater office. The 150 Southport units, renting for $260 to $730, would sit on the CitySide land if the developer can prevail on tax credits.

"Florida is unique in the country in terms of complication and arcane rules," said Peter Leach, senior vice president with Southport, which has been developing affordable projects financed by tax credits since 1986. "It's frustrating for the developer, but it has to be done to protect the public money."

Developers must spend as much as $20,000 to prepare an application, Leach said, and submit it to the state by April with no guarantee of success. They have to have city contributions but are also scored on expertise, location, service to certain communities and a host of other criteria. Then there's a lottery.

If developers receive tax credits, they sell those to corporations, then use the proceeds for the development. But with the subprime mortgage crisis and fallout in the financial markets, there's less appetite now for tax credits because many large corporations are already writing other losses off their books, said Justin Wilson, 908's vice president for development.

"The credit markets are taking a big hit on our business right now," Wilson said. "Financing is a nightmare on this thing."

Unlike Southport, 908 is new to the business of affordable housing. Formed in 2005, 908 was to be a conventional developer, but the market steered it otherwise, Wilson said. Southport almost went into conventional development around the same time but held back.

"We've been through three recessions and by 2006, we could see it coming like a railroad train," Leach said.

Wilson said his firm is seeking to bring design and green building to affordables. Patterning their proposals after successful California projects, they want people to walk by not knowing the development is affordable housing.

"We really want it to be the jewel of the neighborhood," Wilson said of the $68-million projects.

Having 425 proposed units is a spur to affordable housing, city officials say, but the program for tax credits limits counties. Only 150 units could possibly receive tax credits this year in Pinellas. Or zero.

"It's good that we've got so many people interested," said Stephanie Lampe, city housing coordinator, "but it's so sad that we might not get any."

Lampe said having six projects is unusual; there typically would be maybe one application. She said developers might be submitting multiples in hopes of increasing their lottery odds. But the marketplace also makes land more available, developers say.

"Last year, we never would have gotten close to some of the land we're looking at," Leach said. He said his two proposals, one for families and the other for the elderly, have total development costs of $35-million.

Lampe said the last city project funded with tax credits was Wyngate apartments on Fourth Street N in 2004.

Paul Swider can be reached at pswider@sptimes.com or 892-2271.

>>fast facts

Possible sites for affordable housing

908 Development Group

80 units at 333 Dr. M.L. King Jr. St. N

70 units at 1007 Arlington
Ave. N

60 units at 730 Fourth Ave. N

65 units at 819 Third Ave. N

Southport Financial Services

75 units at the northwest corner of Burlington Avenue N and Eighth Street

75 units at the southwest corner of Third Avenue N and Eighth Street

St. Petersburg condos fizzled, so it's on to Plan B 03/11/08 [Last modified: Monday, March 17, 2008 10:19am]

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