Council considers grant for apartments

Main Street Washington director Amy Vetter addressed the Washington City Council about the possibility of funding a grant to rehabilitate apartments downtown. The grant could be for as much as $1.6 million. The council agreed to direct city staff to help Main Street write the grant.

A local match of 20 percent is expected, although some on the council said the match couldn?t come from the city. Vetter said she would take the matter back to her Main Street board to talk more about other sources of matching funds.

The grant opportunity has come about because $15 million in disaster money was left over in the Community Development Block Grant fund through the Department of Housing and Urban Development. The money is available to disaster recovery areas. Vetter said Washington qualifies for the money.

Vetter said she would like to use the money to create or renovate as many as 16 upper-story apartments in the downtown.

City Administrator Brent Hinson said each apartment unit would receive $100,000 if the grant were accepted. He said the grant request would probably be for between $1 million and $1.6 million. Vetter said she had discussions with a majority of the property owners about the project.

Councilor Fred Stark asked Hinson what a reasonable city match would be. Hinson said that a reasonable city match would be 10 percent, or half of the total matching funds. However, he said the city could avoid spending money by using tax increment financing (TIF) on the project, whereby the city would pay the match upfront and be reimbursed by the property owners by the greater revenue in property tax they would produce after renovation.

Hinson said a property owner who was interested in the project would have to pay a certain amount of money upfront in order to be included.

?It?s going to be up to the property owners to get things moving,? Hinson said.

Vetter said the money would be a forgivable loan over a 10-year period.

?We?re starting to look at how to get these buildings into full use,? she said.

Hinson said that there are income restrictions that go with the grant. He said 51 percent of the units would have to meet low- to moderate-income guidelines. Vetter said she didn?t think that would be an issue.

Hinson said, ?If no one meets the criteria, there may not be an application. If five units meet the criteria, then there will be an application for five units. I doubt that all 16 would be in the application.?

Councilor Bob Shellmyer wasn?t crazy about getting the city involved in the project.

?I think we?re racing into it,? he said. ?I want to make sure it?s not going to cost the taxpayers one cent.?

Vetter said that there would be some money spent on the application for the grant. Mayor Sandra Johnson said the property owners should reimburse the city for the expense of writing the grant.

Hinson said, ?If the property owners are really serious about it, they should be able to put the money upfront. On the administrative end of it, there?s not a ton of expense.?

Councilor Bob Shepherd said he supported what Main Street was trying to do.

?We need to work with them to find the funding and the people who will apply for it,? he said. ?We?ve had exceptionally good development in our second and third story. Most of it has been because we?ve assisted but some of it has been on its own. I think it?s the right step to take to make our buildings 100 percent usable.?

Shellmyer was steadfast in his opposition to using city funds.

?I just have to have a guarantee that we?re not going to use taxpayer money,? he said. ?If we can?t ensure that, my vote is a no, but I?m only one of six.?

Vetter said she understood Shellmyer?s point.

?People have seen a lot of development in the downtown and they want the property owners to have skin in the game as well,? she said.