Mandan’s former junior high school property is going to have a new life with a planned $8.3 million in investment to provide 39 units of affordable housing. The Commonwealth Companies of Fond Du Lac, Wisconsin, plans to move forward with the project thanks in part to funding announced this week by the North Dakota Housing Finance Agency (NDHFA).
New Tricks for Old Bricks
“We are thrilled to be a part of this project and grateful to the community and NDHFA for the support,” says Erin Anderson, Commonwealth Companies vice president of development in the midwest region. “We believe affordable housing communities open a door to opportunity for families and individuals, and this project will provide an opportunity to revitalize the neighborhood around the former junior high as well. We are looking forward to working with MetroPlains Management who has provided outstanding affordable housing property management in other properties in Mandan.”
Commonwealth will now be executing an agreement to purchase the property from Mother Teresa Outreach, an affiliate of Spirit of Life Catholic Church, Mandan. The development company plans to begin building renovations in March 2017 and looks to have the project completed and occupied by January 2018.
The project will consist of eight three-bedroom units, 28 two-bedroom units, and three one-bedroom units. Of these, six units will be designated as permanent supportive housing for individuals and families that have experienced homelessness.
Building and site plans include a wellness center, chapel, community rooms and outdoor playground with improved landscaping and green space. The amenities are for use by families living in the building. The newer gymnasium will be demolished to allow for more off-street parking and green space. Support services will be provided by Mother Teresa Outreach.
Federal Funding Gets Project Over Hump
The NDHFA administers the Low Income Housing Tax Credit (LIHTC) and National Housing Trust Fund (HTF) programs in North Dakota. Commonwealth was awarded $698,822 in credit authority through the LIHTC program and $1,021,024 through the HTF for the adaptive reuse of the former school into La Sagrada Familia Apartments.
Under the LIHTC program, property owners receive the federal tax credits for 10 years. The federal tax credits are sold to investors to generate equity for affordable housing projects. Projects supported by the program must be affordable for households at or below 60 percent of area median income for at least 15 years.
The purpose of the HTF is to increase and preserve the supply of rental housing for extremely low income households, those earning less than 30 percent of the area median income. Financial awards are structured as forgivable zero-interest loans with a minimum term of 30 years. Twelve of the units in the project fall under this category including the six permanent supportive housing units mentioned earlier.
Local Support Also Needed
To be considered for federal funds, projects needed evidence of local support equal to at least 1 percent of project costs. The Mandan City Commission in September approved a loan of $83,186 toward the project. This serves as a partial community match toward an interest buy-down program available through the Bank of North Dakota. CommunityWorks North Dakota is providing the remainder of the local match, $89,904, also in the form of a loan.
The Mandan City Commission additionally approved payments in lieu of taxes for the project to help it cash flow. The developer will pay local taxing entities a fixed $20,000 annually for the first five years following renovation with a 3 percent escalator in years six through 15. The property currently generates about $3,000 in property taxes.
When voting to approve the assistance, Mayor Tim Helbling cited the need to address the blighted property and “make the neighborhood whole again.”
Located at 406 4th Avenue NW, the adjoined buildings served throughout their lifetime in various combinations as a senior high, elementary and junior high. Most recently, from September 2008 through December 2009, the newest portion provided educational space for sixth graders as the Great Plains Academy. Mandan Public School District sold the property in August 2012 to GPA, LLC, led by Yegen Development, Grand Forks. Yegen attempted a redevelopment project, but later deemed the project infeasible and donated the property to the Spirit of Life Catholic Church.
The original building was constructed in 1917 with sections added in 1924, 1954, 1966, 1977 and 1990. It is mostly two stories, three stories in one section, and approximately 110,000 square feet. It occupies an entire city block, sitting on approximately 2.07 acres of land. The property is surrounded by single-family homes, both owner- and renter-occupied.