The Ketchum Urban Renewal Agency board of commissioners voted unanimously Monday afternoon to allocate $400,000 to support a 50-unit affordable housing project in downtown Ketchum.
The city of Ketchum, the Ketchum Community Development Corp. and developer Greg Dunfield of GMD Development are spearheading the project, which aims to build affordable housing on East Avenue and Fifth Street, the current site of Ketchum City Hall.
The KURA board will contribute $400,000 to support the project’s application for tax credits from the Idaho Housing and Finance Association, which is due Aug. 2. The funding will help pay for public infrastructure associated with the development.
That $400,000 sum is intended to boost the project’s scoring on IHFA’s rubric and receive an award of tax credits. Dunfield said the project seeks an award of 9 percent tax credits, which will help finance construction of the $14 million to $15 million development. The KURA’s money will only be spent if the project is built.
HFA will announce which projects are receiving the tax credits this fall. Mayor Neil Bradshaw said it’s possible the announcement may come prior to Election Day on Nov. 5.
Voters will decide an $11.5 million bond measure to fund construction of a new fire station near the Wood River Community YMCA. If the bond passes, the Fire Department, Police Department and city administration would move out of the East Avenue facility and into new homes, allowing for the demolition of that building.
The Police Department and the administration are bound for a new City Hall building on Fifth Street and Second Avenue.
If granted tax credits by IHFA, the housing project would commence following the demolition. City Administrator Suzanne Frick told the KURA board that the housing project would proceed regardless of the bond measure’s outcome if IHFA awards tax credits. That may mean finding a temporary home for the Fire Department, if the bond fails.
Dunfield told the City Council on Monday that his timeline is to break ground in spring 2021, so the council could resubmit the bond measure to voters in elections in May and November 2020, if needed.
“This is the moment to apply for 9 percent credits for the city of Ketchum,” Dunfield told the City Council. “I’m very excited about this site.”
The competition for the credits will be stiff, as it is every year, he said. He said projects in Boise and Coeur d’Alene score highly in IHFA’s rubric. This year, Blaine County was designated as a “non-metropolitan difficult development area” by the U.S. Department of Housing and Urban Development.
IHFA administers a HUD program that awards tax credits to developers of low-income housing. The federal program has two main components.
The first is a 4 percent tax credit that covers about 30 percent of the cost of the low-income units’ construction. The second alternative is a 9 percent credit that subsidizes 70 percent of the low-income unit construction cost.
Investors can ex-change a dollar-for-dollar reduction in their tax burden by supplying money to build the affordable rental housing. IHFA has $5.3 million in tax credits to allocate this year, according to the association.
On Monday, the council voted to approve a 99-year lease with the KCDC for the East Avenue property, which would only be executed if the credits are awarded.
The KURA board is in the process of repaying a $1.2 million debt to the city of Ketchum. The city loaned the agency money from its in-lieu housing fund.
The $400,000 will count toward the KURA’s $100,000 annual repayments to the city. The $400,000 may be split up into multiple future budgets, if the project receives tax-credit financing.
Dunfield said the key metric will be the cost per unit, so the money from the KURA will help bring that down.
“Every dollar we can get from local sources to help reduce that dollar-per-unit ask is helpful,” Dunfield told the KURA board. “Think about 50-some-odd units on this site three years from now.”
While the outcome of the bond measure won’t be known until Election Day, Councilwoman Amanda Breen, a KURA board member, told the commissioners it’s important to support the housing project as much as possible.
“This year is extremely favorable to us,” Breen said. “I would hate to see the URA not go forward because they’re nervous about the bond.”