Wednesday, January 19, 2011

At least they didn't say crumbling mill town....

Commonwealth Magazine has an in depth piece on the WinnCompanies' involvement in campaign donations and the company's success at securing tax credits and low interest public loans.  We've had quite a debate in this city regarding affordable housing projects, and while I love the idea of affordable housing, this sort of cozy relationship makes me very uncomfortable.  Is there a better way to create affordable housing without questionable campaign contributions and public money?

Here's the money quote about Worcester's Canal Lofts:
"In downtown Worcester, sitting in the shadow of Interstate 290, there’s an old mill building that has seen better days. A century ago, when Worcester was an industrial hub, the four-story brick complex was an envelope factory. That business faded in the 1970s, and eventually a furniture manufacturer moved in. When the property hit the market a few years ago, two-thirds of the Water Street mill’s square footage sat idle, and several windows had been boarded up. The mill had its location working for it, though. It was a quick walk from Worcester’s train station, and it stood in a neighborhood city officials were trying to fill with new restaurants and residences. The WinnCompanies saw potential, put the mill under agreement, and got the site permitted for the construction of 64 apartments. In June, Winn paid $2 million for the building and a parking lot across the street. The Canal Lofts, as Winn dubbed the project, illustrates the dramatic impact various pools of public subsidies have on Winn’s development projects. Half of the project’s apartments will be set aside as affordable housing units. Because affordable housing restrictions necessarily limit developers’ potential profits, federal and state policy­makers have put a number of subsidies in play to encourage affordable development. The Canal Lofts development is a $25.3 million project. Winn is borrowing $16.3 million from a pair of banks, and another $3.3 million in long-term, low-to-no-interest affordable housing loans from various public agencies. That would leave the developer on the hook for the remaining $5.7 million in development costs. But at Canal Lofts, Winn is tapping $2.2 million in state historic tax credits, $2.5 million in state low-income housing tax credits, and another $711,000 in federal low-income housing tax credits. Taken together, the credits lower the amount of cash Winn has to put into the development from $5.7 million to $314,000."

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