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Council Committee Approves Doubling City Loan for Salvation Army Housing Project

Council Committee Approves Doubling City Loan for Salvation Army Housing Project

Published on Friday, July 10, 2020 | 4:41 am
 

The City’s Economic and Development Committee unanimously passed a recommendation to the City Council Thursday to increase municipal financing for an already-approved four-story affordable housing complex planned by the Salvation Army.

The City Council originally approved an Affordable Housing Loan Agreement for the Hope Center at 1000 E. Walnut Street, back in November of 2019.

The original agreement provided for $1 million in city loan funding. The Committee on Thursday approved doubling the amount to $2 million.

The project would create permanent supportive housing on the complex’s second, third, and fourth floors, and some of the first floor.

The remaining portions would serve as a social services center for the residents as well as low-income people in the community.

The large development is aimed at assisting those currently homelessness, and certain units would be provided to VA service eligible veterans.

The estimated original cost for the Hope House was $31.8 million. According to the presentation to the committee by James Wong of the City’s Housing Department,  new financial factors arose,  creating the need for developers to amend terms of the agreement.

Councilmember Andy Wilson told the committee, “I remember being super excited about this project and supportive housing is desperately needed.”

Saying, “We need to do whatever we must do to move this project along,” Wilson also asked Wong about rising construction costs.

Wong noted that among the factors cited in the report were the impact of the COVID-19 crisis on capital markets, a decrease in prospective donors to the Salvation Army, a modification to accommodate a better time frame for environmental clearances, and rapidly increasing construction costs.

Of this revised development cost, $3 million can be offset by non-city funders, resulting in a net funding gap of $1 million, said the report.

Wong also said that the City’s loan would be spent primarily on pre-construction costs.

With the funding completed, the completion of construction is estimated to be  December 15, 2021.

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