The Venice Housing Authority voted Wednesday to return $8.1 million worth of tax credits for the redevelopment of Grove Terrace Apartments.

Financial woes put the kibosh on Venice Housing Authority's low-income redevelopment housing project at Grove Terrace Apartments.

VHA voted unanimously Wednesday at an emergency meeting to authorize Picerne Development to return $8.1 million in tax credits to the Florida Housing Authority.

In doing so, it agreed not to seek an extension for, or raise funds to pay, the $65,000 Florida Housing Authority filing fee that was due yesterday.

The demise of the project drew heated comments from city officials.

Seated at the table with VHA Board of Commissioners was Venice Mayor Fred Hamett, who chastised Picerne Development for what he called a lack of due diligence.

Hamett said zoning restrictions limiting the project to 84 units and Southwest Florida Water Management District water retention standards have been known since the project began.

"This shouldn't be news to you. This has always been a floodplain," Hamett said. "Now you're saying at the 11th hour this is a problem."

"That's correct," replied Picerne's Chip Cornell.

Feasibility

Cornell defended Picerne's decision to pull out of the project, at least for this year, based on unforeseen events and rising costs.

"You wait until you get the tax credits (before seeking zoning and other variances)," Cornell said. "From that day forward we started doing our due diligence. It's not what you want to hear, but we did our due diligence."

Zoning regulations allow for 13 units per acre, or 84 apartment units on the 6.6 acre Grove Terrace site, just more than half the 144 units the redevelopment project is based on.

Even if the project could be scaled back to 84 units, there would still be a $1.2 million shortfall because tax credits secured for 2006 cover the cost of only 72 units.

Cornell spelled out the increase in costs, which includes $750,000 in construction; $250,000 for more infill; guarantor arrangements that required a set aside in the amount of $250,000; higher insurance and utility costs; and credit pricing that zapped another $283,000 from its profit margin.

"It (all) makes the deal worth less," Cornell said.

VHA board member Richard Appell wanted to know why Picerne couldn't move forward with developing only 72 units since it had the tax credits and loans to cover it. Cornell said the lack of economies of scale and unforeseen increases made the project cost prohibitive.

Venice Planning and Zoning Director Tom Slaughter asked why Picerne didn't consider design alternatives, like putting parking space underneath the apartments, to address Swiftmud concerns.

"We explored those options. Financially it's not feasible," Cornell said. "That would be an absolute impossibility."

Due diligence

Picerne's original plan was to raze the 50-unit Grove Terrace Apartments and build the 144-unit Brookside Village Apartments in two stages of 72 units each, using a series of retention ponds.

Picerne eventually discovered Grove Terrace's ground elevation would need be raised another 2 feet, from 9 feet above the floodplain to 11 feet, in order to meet Swiftmud standards -- at a cost of more than $250,000.

Slaughter called the lack of water storage compensation a critical flaw in the plan.

"Picerne didn't expect to trigger Swiftmud, but it did," Slaughter said. "The real issue is the quality of due diligence."

"This isn't easy or we'd all be doing it. Some mistakes are quite costly. Some are fatal and can kill a project."

The decision not to move forward in 2006 doesn't necessarily mean the end of the project, but it does set it back at least a year.

One option offered by Cornell is to scale back the project to 84 units and reapply for tax credits again in March of 2007.

Whether the VHA board is willing to partner again with Picerne, and vice versa, however, remains to be seen.

http://www.venicegondolier.com/NewsArchive3/111006/vn1.htm

09/30/05

VHA hires developer for new complex

The city's only public housing moves toward replacing its 35-year-old complex with nearly three times as many units.

The tumblers keep falling into place to unlock the funding door at Grove Terrace Apartments, the area's only public housing complex.

The Venice Housing Authority Board approved hiring Picerne Affordable Development on Wednesday as co-developers in VHA's effort to tear down and rebuild the apartments on North Grove Street. The board's goal is to replace the 50 units, built 35 years ago, with up to 144 townhouse-style units on VHA's 6.6 acres of land.

In order to pay for this, VHA will apply next February for Low-Income Housing Tax Credit financing. Hiring a co-developer was the next step in meeting application requirements.

VHA Executive Director Peter Lopez is aware that Grove Terrace could wind up being the first bit of major redevelopment in an area that's been targeted for reconstruction for many years.

Many of Grove Terrace's neighbors -- the city drinking water plant, fire station and a pair of concrete plants -- are slated for relocation. However, only a deal for the concrete plants has been signed, and it may take until late 2007 just to move the plants, let alone rebuild.

The new low-income and workforce housing complex could be done by the end of 2007, if VHA is awarded Low-Income Housing Tax Credit financing.

"Our final product is going to be a positive on other developments," Lopez said. "I think it would be a catalyst for (industrial district redevelopment).

"Our final product will fit well with future developments. And most importantly, it would provide housing that's in town and close to everything."

Scaled back

The redevelopment project is only for VHA's 6.6 acres of land along North Grove Street that's split by Hatchett Creek Bridge and has U.S. 41 Bypass along its eastern property line.

Not too long ago, VHA was attempting to obtain local resident Don O'Connell's 5 acres of property along its northwest property line. That partnership has since fallen through because of VHA going after LIHTC funding, which has stringent restrictions

One of those is that none of the properties can be sold, and at least 50 units must go to the poorest of tenants.

"I didn't want my property to be used for low-income housing," O'Connell said. "My goal was for more workforce housing, something that would be truly mixed-income housing, make it a high-end development. ... What he's putting in there, I think people will still view as subsidized housing."

Lopez admits that he is a fan of O'Connell's idea, but such an extensive redevelopment project would take too long to make a reality.

The current complex is falling apart. VHA will eventually spend more than $300,000 just to correct numerous city building violations in its 50 units.

Then there are chronic problems like termites, insects, poor building design and a never-ending waiting list of people -- many of them elderly -- who need a place to stay.

Venice needs a better facility and more living units, and going for tax credits is the best way to complete that job by late 2007 or early 2008, Lopez said.

O'Connell does offer his support for Lopez's plan. O'Connell has been involved as an owner in the local rental property business for more than 30 years, and the retired judge also was VHA's attorney in the 1970s.

"If they get the right people and do this right, they can pull it off," O'Connell said. "But if they don't, the stigma will still be there. ... I'm going to be monitoring this closely. I want to see where the road goes, to see how they develop it to diffuse the stigma of public housing."

Getting the money

If funding is approved, Lopez intends to mix residents of the complex. Fifty units would be for the lowest income residents, in order to meet guidelines, but the remaining units would all be reserved for people who make less than Sarasota County's median income, about $42,000 a year.

A balance of incomes and nice architectural design is how one erases the stigma of "low-income housing," Lopez said.

Trident Housing Corp. out of Jacksonville will work through next February's filing deadline to compile VHA's tax credit financing application. Kristen Packard, head of Trident Housing, helped obtain financing for 312 units at Riley Chase in North Port and 264 units at Noah's Landing in Naples.

VHA's co-developer, Picerne out of Altamonte Springs, Fla., will work to piece together the concept plan for what would be built and the estimated cost, which are requirements of the application.

Lopez envisions multiple buildings with parking underneath, a community center, green space and 50-50 split between elderly and family housing. Over the next several months, architects will let Lopez know how much of that is realistic.

One challenge will be city and resident approval. Voters have been loud in their support of affordable housing, but even louder in opposition of buildings taller than 35 feet and any high-density developments.

The proposed 144 units would exceed the city's maximum building density of 18 units per acre. Current density at Grove Terrace is about 7.6 units per acre; 144 units would put it at 21.8 units per acre.

Lopez is willing to lower that to 120 units, which is within the city's maximum density.

"Both we and the developer have to think about what we could create, and can we get it into a comfortable environment for those who live here," Lopez said. "That will play a significant role in what we decide."

http://www.venicegondolier.com/NewsArchive3/093005/tp1vn3.htm    Originally posted Sept 30,2005