From the Cedar Rapids Gazette:
Minneapolis developer Sherman Associates plans to buy and renovate the Roosevelt, the former downtown hotel at 200 First Ave. NE that was converted to apartments in the early 1980s...If you include paying back the loan which the Cedar Rapids City Council will undoubtedly rubber stamp, that means Sherman Associates bought an existing apartment building for 51 cents on the dollar. The other 49% came out of your Federal and State taxes.
...The $7.7 million purchase and renovation is contingent on funding that includes a $775,000 loan from the city of Cedar Rapids plus federal and state tax credits and the approval of the Iowa Finance Authority, said Jackie Nickolaus, Sherman Associates vice president, on Tuesday.
The City Council is scheduled to vote on the loan tonight...
...The city assessor values the property at $3 million...
...Nickolaus said Tuesday that the plan is for about 75 percent of the units to qualify as affordable housing units with the remaining 25 percent to be rented at market rate...
...Figures provided by the city's Community Development Department put Sherman Associates' cost of purchase and renovation of The Roosevelt at $7,695,350.
About 46 percent of the total investment will come from Sherman Associates, 44 percent from federal and state tax programs and 10 percent from the city loan, which will be repaid, according to the city.
The federal and state money comes via tax credits designed to support affordable housing and historic buildings. A private entity buys the tax credits, money from which goes to the building project, and, in turn, the private entity lessens its tax liability.
Where is the payoff for the taxpayers?
Is it in the 75% of people who have to meet the low-income guidelines in order to live in the apartment building? No way, because it's likely they are all getting some sort of government assistance.
At least this isn't as bad as the Osada debacle in Cedar Rapids, Al Gore's "National Example" of how government could never run a low-income apartment complex and how millions of taxpayer dollars went right down the toilet.
Or Tom Harkin's "Electric Bus" idea for Cedar Rapids, which cost taxpayers $10 million to buy and operate nine City buses. The electric buses were prone to failures and the entire fleet was driven less than 200,000 miles in total (...that's over $50 a mile, folks...) before being mothballed and later sold at auction for just a few thousand dollars each.
Meanwhile, the Cedar Rapids "Civil Rights Commission", who gets their money from shaking down every apartment complex in town, now has to explain why their rent is almost $5000 a month and why the HNIC is attending conferences all over the United States and even in Barbados.
2 comments:
I've no doubt, there will be people lining up, to be one of the lucky 25%, to be able to pay "market rates" to live in a low income highrise.
My son and daughter in law live in the Roosevelt, they are college students. They pay all of their rent, no government assistance. There are many nice people that live there.
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