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Indianapolis Housing Agency pulls off big tax credit deal

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The largest tax credit deal in state history will fund the rehabilitation of 538 apartments in four complexes owned by the Indianapolis Housing Agency.

City Real Estate Advisors Inc., a unit of locally based City Securities, raised $23.5 million in tax-credit equity. It placed the credits with three institutional investors in a deal closed Feb. 22. Sales of state-approved tax credits typically raise $2 million to $8 million per deal, said Jeffrey A. Whiting, CEO of City Real Estate Advisors.
 

tax credit The city’s housing agency is planning a rehab and expansion of Lugar Tower. (IBJ Photo/ Mason King)

Those amounts are trending larger following a 2008 change in how housing agencies can allocate credits, Whiting said. In fact, the record set by the recent sale could fall yet this year.

The local housing agency will learn later this month if the state will authorize the placement of additional credits that could raise another $60 million. That money would fund renovations, replacements or additions to four other properties, including Lugar Tower, at 901 Fort Wayne Ave., and the Caravelle Commons complex near 16th Street and College Avenue. Caravelle’s 65 units would be demolished and replaced with 155 units of new construction.
 

IBJ.COM EXTRA
Click here to read about the potential next wave of projects.

The proceeds of the recent deal are being packaged with approximately $6 million in stimulus funds awarded last year by the federal government to completely overhaul the following complexes, all of which were built in the 1960s and early 1970s:

• Twin Hills, 2210 E. 36th St., a collection of 64 mostly two- and three-bedroom apartments in 18 two-story buildings;

• Blackburn Terrace, 3091 Baltimore Ave., a 243-unit complex of mostly two- and three-bedroom units in 60 low-rise buildings;

• Laurelwood Apartments, 3340 Teakwood Drive, a 135-unit property in 39 two-story buildings; and

• Rowney Terrace, 1353 S. Riley Ave., with 96 units spread over 32 buildings.

Bruce Baird, the housing agency’s director of strategic planning and development, said limited work began last July using the stimulus money. Proceeds from the sale of the tax credits allows contractors to proceed with a total makeover of the four properties, which will receive new mechanical systems and interiors.

A year ago, tax credits were a tough sell, but “investors seem to be tiptoeing back into the market,” Baird said. The housing agency got 67 cents on the dollar in the recent round of sales and is shooting for 73 cents if it gets the green light from the state to place more tax credits.

The work planned if that deal is approved would result in another 766 new or rehabbed public housing units in the city.

“No one has upgraded a portfolio of public housing to this extent,” Baird said.

Among those benefiting are local construction firms that might otherwise be struggling to find work in an economy where big construction projects are in short supply.

“I wouldn’t want to have to support a large, fixed-overhead company selling single-family [homes],” said Jim Thomas, whose firms are involved in both development and construction. His construction firm, CRG Residential, specializes in large-scale apartment rehabs and has the contract, along with Powers & Sons Construction, to overhaul the Twin Hills/Blackburn Terrace complexes.

Thomas and partners Chris Reid and Brian Cranor also operate the development firm Hearthview Residential, whose projects include Meridian Arch at St. Clair and Meridian streets and Lockerbie Park at Park Avenue and Michigan Street. But the construction firm is where the action is now, Thomas said. The company does, on average, $75 million in business a year in 20 states east of the Mississippi River.

The contract to rehab the housing agency’s Laurelwood/Rowney complexes went to Turner Construction Co., in partnership with Davis & Associates Inc. Design work for that project was handled by architecture firm A2SO4. Domain Architecture is the architect for the Twin Hills/Blackburn Terrace projects.•

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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