City commits $600,000 to senior housing project

IOWA CITY - Officials looking to build a 41-unit senior housing project - consisting almost entirely of affordable housing units - have received a conditional commitment of $600,000 from the Iowa City Council.

The council Tuesday unanimously approved (with Kingsley Botchway absent) a $600,000 award to the project proposed by Iowa City Senior Apartments L.P. for the 1000 block of William Street.

The money is predicated on the developer receiving almost $5.5 million in Low-Income Housing Tax Credit funds from the Iowa Finance Authority.

'If we don't get funded, the request goes away,” said Tracy Hightshoe, neighborhood services coordinator.

The group will apply in December for the tax credit funds, marking the development's third application for the state tax credits since 2012. The city's financial commitment to the project will come from taxable bonds or a non-tax exempt source.

The Iowa City commitment not only will close the gap in finances, but also will increase the group's application score for the state funds.

'With that amount of contribution, that puts us in the best place to secure the funds,” City Manager Tom Markus said.

The vacant building at 1070 Williams St. was built in 1967 and is scheduled for demolition regardless of whether funds are received. If they are, $860,000 will go toward acquiring the site from its current owner.

Total project cost for the roughly 45,000-square-foot building is estimated at $7.4 million, with the building proposed to include 20 one-bedroom and 21 two-bedroom units.

Four units will be affordable to households below 30 percent of the area median income, 12 units would be affordable to those below 40 percent, and 20 units will be affordable to households below 60 percent of the area median income. The final five units will be unrestricted, with one occupied by a resident manager.

Affordable units would range from an estimated $400 to $675 a month for one bedroom and $465 to $810 for two bedrooms.

A proposed timeline for the project has construction finished by August 2017 and the building at full occupancy by the year's end.