More than six months has passed now since Des Moines developer Jack Hatch unveiled a plan to no little City Hall enthusiasm to build the Oakhill Jackson Brickstone Apartments along Sixth Street SE.
Hatch chose to locate his so-called affordable housing proposal in the Oak Hill Neighborhood, which is near the downtown and long has been in decline, was flood damaged and has been a City Hall target for revitalization.
City Hall saw Hatch’s idea, which is financed in large part with federal tax credits with some city incentives, as a great example of “work force housing,” the label that city officials say better describes who lives in such housing than “affordable housing.”
All that came back at the start of October.
In an interview on Tuesday, Hatch, who is a state senator, said the project is on hold.
The reasons, he said, are at least three, with the primary reason being the difficulty in finding investors in a lousy economy.
Those potential investors, he said, also are a little skittish about building in a spot that was flooded in 2008, even though Hatch has proposed his two-building project with first-floor parking designed to flood.
Additionally, potential investors are interested in what will happen to Linn County’s flood-damaged, industrial-like Options building that backs up to Sixth Street SE. Hatch’s idea is that the county demolish the building – The Linn County Board of Supervisors said last week it is interested in moving Options to a new site with the Federal Emergency Management Agency paying most of the bill — so that large block can become open space or space for additional new residential development.
Hatch said none of the problems with the economy or the building site has deterred him from his commitment to build the Brickstone Apartments.
However, he acknowledged that he pulled the project from consideration this week by the Iowa Finance Authority.
The Authority awards federal tax credits for affordable housing proposals, but Hatch said he pulled his project for now from the Authority’s agenda until he secures his investors.
In tax-credit projects, corporations, for instance, contribute cash to an affordable housing project in exchange for credit against their federal tax bills over 10 years.
In recent years, tax credits have been limited, corporations have had cash to invest in them and the corporations have had to invest about 90 cents for $1 worth of tax credit.
Today, in the aftermath of Iowa’s 2008 flooding disasters, Iowa has received a major infusion of additional tax credits, but corporations have less cash to invest and those that do invest are investing only about 70 cents per $1 worth of tax credit.
“The difficulty is this global economy,” Hatch said Tuesday.
Hatch has successfully built several tax-credit financed projects in Des Moines, and is pushing ahead with an 18-unit building there even now.
But for now, his idea for Oak Hill Neighborhood must await.
At the same time, Hatch said his current difficulty in Cedar Rapids is more than the global economy. He said he thinks he could build the project elsewhere in the city, but he added he doesn’t want to. He said he has a commitment to the Oak Hill Neighborhood, and that’s where he thinks the project needs to be.
His proposal calls for building one Brickstone on the east side of Sixth Street SE at the corner of 12th Avenue SE and one on the west side of Sixth Street SE from Ninth to 10th avenues SE.
He envisions his development and others to help turn Sixth Street SE into a pedestrian-friendly area where residents can walk to Eighth Avenue SE and to the downtown.
Flood protection remains an issue for the project, he said, even though, as now designed, the project’s first floor will be reserved for flooding.
Hatch said he thinks the City Council should alter its recent decision not to provide additional, temporary flood protection below Eighth Avenue SE.
The council made the decision after city staff reported that it would cost $3 million to install temporary flood protection below Eighth Avenue on the east side of the river to protect only about $1 million of homes and first-floor properties.