Court Tower Renovation to Move Forward with Tax Credit Award

Source: http://www.thenorthwestern.com/
Jeff Bollier of the Northwestern reports:

The Oshkosh Housing Authority has been awarded $8.8 million in federal tax credits that it plans to use to finance the first half of renovations to the 156-unit Court Tower complex.

The Wisconsin Housing and Economic Development Authority awarded the credits for the Court Tower project earlier this year and Oshkosh Housing Authority Executive Director Brad

Masterson said he believes the size of the award could be increased if WHEDA has unsold tax credits returned to it in late 2011 or early 2012.

The project would renovate the building’s interior to convert three existing apartments into two new ones, reducing the number of units from 156 to about 100.

After the renovations, Court Tower would also become housing for people age 50 and up instead of the present mix of elderly and disabled or handicapped residents.

As the project takes shape, the housing authority would identify properties it could renovate and use to relocate Court Tower residents and to make up for the reduction in apartments at Court Tower.

Masterson said residents who already live at Court Tower would retain the right to stay there, but Masterson said the housing authority would offer incentives to move tenants to replacement housing in other areas of the community.

During the authority’s bi-monthly meeting Monday, Masterson told the board of directors that construction would likely begin in spring once the authority arranges to sell the credits to a private equity firm. He told board members five firms have already expressed an interest in buying the credits for more than 80 cents for each dollar of credits, a rate about 20 cents higher than was paid on previous projects the housing authority financed with WHEDA credits.

Under the WHEDA program, the firm or individual that buys the tax credits from the authority would take ownership of the 37-year-old building as renovations began. The buyer/developer maintains ownership until they use all the tax credits, usually over several years. The housing authority keeps the right to operate and lease the complex during that period.

The programs are attractive to equity firms and investors because they can use them to offset federal tax liabilities on a dollar-for-dollar basis.

The credits the authority has received only cover half of the projected renovation costs, so Masterson said the housing authority plans to file another application with WHEDA in 2012 to secure the remaining credits needed to finance the project.

This was the third year in a row the Oshkosh Housing Authority had applied for WHEDA tax credits to finance Court Tower renovations. WHEDA did not approve the project application in 2010 and the organization had to return $26.5 million in credits awarded in 2009 after it could not find a buyer.