Wednesday, June 19, 2019 || By Michael Romain || @maywoodnews
Featured image: An architectural rendering of the entry lobby of a proposed apartment building at 800-820 S. 5th Ave. in Maywood. | Interfaith Housing Development Corporation
A developer seeking to build 72 affordable apartment units on village-owned land located at 800-820 S. 5th Ave. in Maywood has yet again pushed back the completion date for the project.
During a regular meeting on June 4, the Maywood Board of Trustees unanimously voted to amend the redevelopment agreement between the village and the nonprofit Interfaith Housing Development Corporation for the second time in less than a year.
The amendment extends the amount of time that Interfaith has to close on the purchase of the village-owned property, from May 1, 2019 to Aug. 30, 2019, and also extends the May 1, 2020 deadline for completing construction on the $19.5 million project to Dec. 31, 2020.
Last November, the board voted on the first amendment to the IGA, which pushed the closing date out from Oct. 30, 2018 to May 1, 2019, and the project completion date out from Oct. 20, 2019 to May 1, 2020.
Interfaith officials said back then that they needed more time to meet the requirements of a $990,000 capital award from Federal Home Loan Bank of Cincinnati.
During the June 4 meeting, Perry Vietti, Interfaith’s president, said that the reason he was asking for yet another extension is because of the tough funding environment created by the Tax Cuts and Jobs Act of 2017.
The legislation, he said, “has really hurt the marketplace for the kind of affordable properties we build.” Under the law, the federal corporate tax rate decreased from 36 percent to 22 percent.
“Consequently, the appetite for investors to invest in our kind of housing has weakened,” Vietti said. “It’s harder to raise the equity needed for these developments. We’ve had to bring on another partner and have had to go back to the Illinois Housing Authority for more tax credits. That’s why this has gone on longer than expected.”
As previously reported by Village Free Press, Interfaith owns and manages all of the buildings it operates through a for-profit entity and functions like any other market-rate development. In the case of its proposed Maywood building, that entity is Fifth Avenue Apartments, LLC, Vietti said.
Interfaith officials have explained in the past that what makes their housing affordable is the fact it is income-targeted, meaning that eligible tenants must have incomes that fall below certain percentages of the area median income.
Eligible tenants of a one-person household would need to make no more than 60 percent of the average median income, or $32,180. For a four-person household, 60 percent of the average median income is $47,400, according to information Vietti said during a community meeting in August 2017. Interfaith rents, he said, range from between $673 to $808 for a studio unit to $1,000 to $1,200 for a three-bedroom unit.
A rendering of the proposed building along the alley. | Interfaith Housing Development Corporation
The proposed Maywood apartment building will comprise 16 studios units, 32 one-bedroom units, 16 two-bedroom units and eight three-bedroom units.
On June 4, Vietti responded to what he said were some common misconceptions about the project, such as the assertion that, since Interfaith is a nonprofit, the building will not generate any property tax revenue.
Vietti reassured residents that the for-profit Fifth Avenue Apartments LLC will be the ownership entity for the apartment building — not Interfaith. He said that both the for-profit entity and the retail establishment planned for the first-floor will pay property taxes. In addition, the retail establishment will generate sales tax revenue.
In 2017, Interfaith officials said that the 5th Avenue development could bring in an estimated annual property tax revenue of around $60,000 to $70,000.
A rendering of a unit kitchen and living area. | Interfaith Housing Development Corporation
On June 4, Vietti tried reassuring board members and residents that the project was still on course, despite the setbacks.
“I’m sorry I have to come back for yet another extension, but it’s the nature of where we are in this funding environment,” he said.
Vietti added that Interfaith has secured the $19.5 million that it will take to build the project and has already spent $1 million on administrative costs related to the project. He said that he hopes to break ground before summer is over.
“We’re invested in this project and in the village of Maywood,” Vietti said. “We intend for this project to go forward.” VFP
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