Durham’s Whitted School renovation project missed out on $710,000 in low-income housing tax credits, and Durham officials are not happy about one reason why the N.C. Housing Finance Agency denied them.
The project would convert Whitted, a 1922 school building on Umstead Street, into 89 low-cost apartments for the elderly and a pre-kindergarten center. It was was one of 109 projects statewide that applied for more than $22 million in federal tax credits, which developers may then sell and use the income for construction.
“Their application was extremely competitive,” Deputy Durham County Manager Lee Worsley said.
In fact, it received a perfect score from the NCHFA evaluators. That agency, though, changed its rules for the 2013 grants so that Mecklenburg and Wake counties got more, while Durham and several other urban counties got less.
“It was an intense lobbying effort (by) “larger developers most active in Wake and Mecklenburg,” said Larry Jarvis, assistant director of the city’s community-development department.
“We should be filing an official protest,” said County Commissioner Ellen Reckhow, after Worsley and Jarvis described what happened to local officials last week.
“The city has commented,” Jarvis said.
In the meantime, one Durham project – the 76-townhouse Vermillion project developer Jim Yamin is building for low-income tenants on Cook Road – got $450,000 worth of 2013 credits, while two Mecklenbug County projects got a total of $1.49 million and $2.55 million went to four projects in Wake County.
Jarvis said Vermillion was favored over Whitted because it had a lower per-unit cost in tax credits – $5,921 versus $7,978 – but Whitted’s per-unit cost was lower than those of any of the four Wake County projects.
For distribution purposes, the Housing Finance Agency ( bit.ly/19LhuUi) each year allocates a particular percentage of grants to counties in each of four regions: East, West, Central and Metro, the last consisting of urban counties with high populations. Due to their larger populations and the particular needs of cities, Metro counties get a relatively high share, and may get funding for several projects a year while smaller counties get funding for only one.
In the past, Durham was included, along with Wake, Mecklenburg, Forsyth, Guilford and Cumberland. For 2013, only Wake and Mecklenburg were rated Metro, to get 19 percent of the total. Durham was switched into the one-shot Central pool, with 29 other counties competing for 35 percent.
Project scoring in 2013 also eliminated point awards for local subsidies, land donations or a project’s location in a designated revitalization area. The city of Durham, Durham County and Durham Public Schools have committed money to renovating Whitted, the original Hillside High School and a landmark in the Southside revitalization district just south of downtown Durham.
The Whitted developer, Integral Development of Atlanta, plans to apply for 2014 credits, Worsley said. Failing to win credits one year is no particular impediment to winning them with a subsequent application – Durham’s Southside East project, formerly Rolling Hills, missed out in 2010 but received credits in 2011 – and Durham is making its case for changing the rules next year ( bit.ly/18X8BVt), Worsley said.
“To make sure more applications are considered for Durham County, because there certainly is the need in this community,” he said.
“We tried to argue points should be awarded for counties that have historically been underserved in the tax credit program,” Jarvis said. “Since 2008, there have been 20 awards in Wake, only three in Durham – points need to be given to even things up.”