Thistle Proposes $47M Refinancing to Rehabilitate Five Boulder County Affordable Rental Properties
Boulder County affordable housing provider Thistle has proposed a $47.2 million refinancing that will allow $23.7 million of rehabilitation work on 159 dwellings across five rental properties starting in 2019.
Three of the properties, encompassing 132 of the units that would be renovated, are in Longmont, and two totaling 27 units are in Boulder.
Anticipated hard construction costs for the project, according to Thistle Asset Manger Elycia Boyer, are $11 million for all three Longmont properties that would be improved: the 76-unit Parkville Apartments at 1050 16th Ave., the 32-unit English Village in the 1300 block of South Coffman Street and the 24-unit Terry Street Apartments at 1917 and 1925 Terry St.
Thistle is hoping to pour $12.7 million into the two Boulder properties: the 19-unit Sage Court Apartments at 2965 Valmont Road and the 8-unit Laguna Place Apartments at 4480 Laguna Place, Boyer said.
“All five properties will be combined together into one ownership entity. Economics of scale come along with that,” said Alisa Wilson, vice president of S.B. Clark Companies, a Denver firm contracted by Thistle as a consultant on the project. “This is really a great way to get the most bang for your buck when doing a refinance and rehab.”
Longmont asked to contribute
Thistle is still seeking public funding through state and federal low-income housing tax credits for the project, and on Wednesday asked Longmont to chip in $600,000 that would almost cover the $660,000 cost of installing fire suppression systems at each of the three properties in the city where renovation is being pursued.
A sprinkler system in the past year helped extinguish a fire at Thistle’s 1200 Kimbark St. property in Longmont, Boyer said to the Longmont Affordable Housing Technical Advisory Group while presenting the housing provider’s funding application.
“The fire suppression system saved the buildings and people’s property. That was a big deal to us. We need to make sure we can add fire sprinkler systems to all our buildings,” she added. ”... Basically, we’re asking the city for the sprinkler systems.”
Thistle also plans to ask the Colorado Division of Housing for another $600,000 contribution toward the project, and will know by May whether it will receive state and federal tax credits toward it.
If the nonprofit housing provider is denied the tax credits for the project, it would have to “go back to the drawing board” in considering scopes of work for each property, Boyer said.
“Receiving funds from the city of Longmont is critical to being competitive in that round (of tax credit allocation). Evaluating one project against the next, any local funding you can bring to the table is an advantage,” Wilson said. “The properties will be affordable for another 40 years with this project. It’s a long term commitment to affordability.”
Hard to compete with Longmont’s market rate
Adjustments will have to be made by the properties’ residents if the rehabilitations are financed.
Temporary relocations of tenants may be necessary during some portions of the renovations, if the financing is approved, and a 5 percent rent hike has been planned by Thistle.
“Our board has passed previously a guideline to be able to evaluate some cases (and negate rent hikes) on an individual basis for hardship,” Thistle CEO Mary Duvall said.
But the housing provider hasn’t been charging the maximum rates it could in Longmont, because affordable housing area median income thresholds are set for the entire county, and the Boulder market tilts them beyond what they would be for Longmont alone.
″(Our Longmont) properties are not nearly as competitive as all the new product in Longmont. They’re obsolete in many ways. (Renters) want air conditioners, they want dishwashers,” Boyer said.
Adding insulation to the apartment buildings and more efficiently sealing them to protect warm air from escaping into cold weather will also be done if the project moves forward.
“Once we rehab and refurbish, we won’t have as many maintenance issues. Those costs will go down,” Wilson said.
Whether the $600,000 will be contributed by Longmont to the project will be known after Thistle’s proposal is presented to the city’s Housing and Human Services Advisory Board in January, when it will form a recommendation to City Council on making final decision.
Sam Lounsberry: 303-473-1322, email@example.com and twitter.com/samlounz .