By Emily Toepher, West Valley View, August 14, 2015

BRIAN SWANTON, Arizona market president of Gorman and Co., speaks Tuesday at the groundbreaking for Madison Heights, Avondale’s new housing project on Dysart Road and Madison Street. The project is the first in the state to take advantage of a new federal program called the Rental Assistance Demonstration program. View photo by Jordan Christopher

BRIAN SWANTON, Arizona market president of Gorman and Co., speaks Tuesday at the groundbreaking for Madison Heights, Avondale’s new housing project on Dysart Road and Madison Street. The project is the first in the state to take advantage of a new federal program called the Rental Assistance Demonstration program. View photo by Jordan Christopher

AVONDALE – A rental housing project in Avondale will increase the number of affordable units for low-income residents and be the first in Arizona to use a new federal program.

Developers broke ground Tuesday on the two-story Madison Heights project at 1103 N. Sixth St. in Avondale, which will have 143 units and should completed in December 2016. The state-of-the-art, environmentally friendly, multi-family development will replace 77 existing dilapidated units on the property, which were built in 1973 and have evaporative coolers.

“It was painfully obvious that this wonderful housing project had outlived its economic and physical usefulness,” said Mike Trailor, director of the Arizona Department of Housing. “These days, for people to be living in substandard housing with swamp coolers in Arizona when it’s 113 [degrees] is not a very good situation.”

To qualify for the housing, residents must earn at or below 60 percent of the area’s median income. The amount is adjusted by family size and a variety of other factors, but roughly equals $20,000 to $40,000 a year, said Brian Swanton, Arizona market president for Gorman and Co., one of the project’s partners.

“We don’t leave any of our citizens behind,” Avondale Mayor Kenn Weise said. “The revitalization of historic Avondale and this project really do show that Avondale is one community, one mind and one voice.”

The new housing units have varying floor plans, and the property will feature on-site amenities, including a computer lab, fitness center and multipurpose community room with free before- and after-school programming. It will also offer services such as job training, job search assistance and job placement, Trailor said.

“This isn’t just about putting a roof over people’s heads; it’s about addressing their greatest needs and helping them to overcome the fears and burdens they’ve carried with them for years,” he said. “I’m a big believer in sustainability, but in our culture, sustainability starts with having a job. So helping people get employed and helping them seek their greatest potential is a real important part of what we do.”

Several residents are still living in the current units, and will be given the option to return to the property at their same rental amount once the new buildings are complete, Swanton said. Demolition on the exiting units will start Sept. 1. Most of the residents already chose to relocate to other public housing in the last 12 to 18 months, and no new units were rented out in that time, he said.

1st to use federal program

The project is the first in Arizona to take advantage of a new federal program called the Rental Assistance Demonstration program, designed to redevelop the nation’s aging stock of public housing. It allows public housing agencies to leverage public and private debt and equity in order to reinvest in the public housing stock. The program is cost-neutral and does not increase the budget of the Department of Housing and Urban Development.

Which is particularly useful since the country currently has a $26 billion backlog of capital needs, said Ophelia Basgal, regional administrator of HUD.

“The amount of money they get on an annual basis for capital funding simply wasn’t sufficient to address this kind of backlog,” Basgal said.

Through the program, units move to a Section 8 platform with a long-term contract that, by law, must be renewed, and ensures the units remain permanently affordable to low-income households. Residents continue to pay 30 percent of their income toward the rent and maintain the same basic rights they possess in the public housing program. The RAD program has allowed local communities across the country to raise more than $989 million in new capital funding, which affected almost 18,000 units, she said.

About 170,000 affordable housing units have been lost to sale or demolition, and the backlog threatened the loss of 10,000 more units each year because of disrepair, Basgal said.

RAD started with a limit of 60,000 units, but Congress raised the cap last year to 185,000 and President Barack Obama has asked Congress to lift the cap entirely, she said. A bill currently before Congress would also reduce home funds dramatically, cutting about 93 percent or $13.3 million of funding in Arizona, Basgal said.

“When you’re here and you see what a difference it makes, it’s important to know that’s being talked about,” she said.



$44M renovation coming for historic Phoenix neighborhood

By:  Pete Scholz, Channel 12 News, Phoenix, April 23, 2015

An historic Phoenix neighborhood which was slated to be demolished a few years ago is experiencing a renaissance, of sorts.  Residents took in the latest plans at a community meeting in the Coffelt Public Housing Development Thursday.

To look at the 38 acres of 1950’s barrack-style housing occupying the southwest corner of 19th Avenue and Buckeye near downtown Phoenix is to get a glimpse of Arizona’s history.  And, generations of residents have called the Coffelt-Lamoreaux Public Housing Development home.

“The folks that live at Coffelt take an extreme level of pride for where they live,” Brian Swanton, president of the Arizona Market for Gorman  & Company says.  “They didn’t want to move and they were loud and clear about that.  They wanted to stay.”

Over the past two years a unique, public-private relationship was forged to make sure that was going to happen.

Oscar Perdolmo is a 13-year resident of the neighborhood just southwest of downtown.   “I’m excited because I like living here,” he said. “I like my neighbors and the people I live with.  It’s very calm.”

Excitement grew when the Housing Authority of Maricopa County and their partners at Gorman & Company were able to win National Historic Registration for the site built back in 1953. The designation, along with additional financing, has resulted in a $44 million makeover about to launch in the coming months.

“It’s basically a gut rehabilitation, as we call it,” Swanton explained.  “We’re preserving the exterior facade of the buildings but everything will be brand new inside — the bones of the building.”

Swanton also shared that $90,000 has been budgeted for each of the 301 units to be redone.  From the floors to the roofs, upgrades will include cabinetry, appliances, sinks and flooring.  Well-worn swamp coolers will also be scrapped for new heating and air conditioning units.

In addition, plans are also in place to temporarily move tenants to unoccupied units during construction, which should add a little more peace of mind to anxious residents.

“They came in my home and took an inventory of all of my equipment; all of my furniture,”  Antonio Cabrera, a nine-year resident said. “To make sure that they can move it with no cost for myself once the renovations get under way.”

The project is also adding a new and improved park and community center.  And, the developer is hoping to improve air quality in the neighborhood by improving irrigation and  planting more trees along connecting streets.

According to Gorman & Company, the Coffelt renovation is scheduled to begin on or around October 1, 2015, and last about 17 months. Interest in the program is growing, as well.  Housing Authority of Maricopa County says that the waiting list to move into one of the newly-renovated units stands at 1,000 names.

2014 MFE Award goes to Lofts at McKinley

Multifamily Executive, October 2014

The Lofts at McKinley certainly has originality on its side: The property is the first senior housing development to be constructed in downtown Phoenix in almost 20 years, and it’s the first LEED Platinum-certified multifamily senior housing development in Arizona.

Gorman & Co.’s extensive experience in historic renovation came in handy on the project. The site is within the boundaries of both the Roosevelt Historic District and an “Area of Potential Effect” for archaeologically significant assets dating back to the Hohokam Indians. The designations required compliance with 26 historic preservation stipulations, as well as consultation with local Native American tribes and an archaeological dig.

Additionally, asbestos from the abandoned building occupying the site had to be cleared, and a zoning change was made after developers submitted the building application, causing a rework of the design.

Given the development hurdles, time saved during construction by using prefab SIPs instead of standard wood framing was critical to staying on deadline. They serve as a green feature, along with roof-mounted solar panels and a water harvesting system.

In a walkable, revitalized historic neighborhood, the Lofts at McKinley fills a gap in Phoenix’s housing market by providing 100 percent accessible, urban living for the 55-plus community. Rents are aimed at those earning 40 percent to 60 percent of the area median income.

Response has been strong; the property was fully leased in three weeks, with a majority of residents coming from outside the downtown area, nearly half with a disability and/or sensory impairment.

Escobedo at Verde Vista opens in Mesa

East Valley Tribune, Thursday, December 5, 2013

The City of Mesa held a grand opening event on Dec. 4 for a new mixed-use development that will provide housing for low- to moderate-income families.

The Escobedo at Verde Vista features 70 energy efficient rental units accessible to people with physical disabilities. A few amenities include a business center, clubhouse, state-of-the-art fitness center and a picnic area. Escobedo at Verde Vista will also house the new headquarters for Save the Family Foundation of Arizona; an organization that helps homeless families become self sufficient.

The development was built on the site of a facility that was vacated in 2007, and a few units from the original version were not demolished. The four “legacy” units include a leasing office, a multi-purpose building for a before-and-after school program, a computer lab and training center, a theatre and fitness center, and a museum.

Financing for Escobedo at Verde Vista came from private equity via the sale of federal tax credits. The development was constructed by the City of Mesa, Gorman & Company, Affordable Rental Movement and the West Mesa Community Development Corporation.

“We are happy to see quality private investments like Escobedo at Verde Vista coming to the City,” Mayor Scott Smith said in a statement. “It shows people have decided that Downtown Mesa is a great place to invest.”

Chris Glover

Mesa City Councilmember Chris Glover speaks at the opening of Escobedo at Verde Vista on Dec. 4, 2013. [Courtesy City of Mesa]


Low-cost housing center Escobedo to open in Mesa

The Arizona Republic , November 29, 2013

A new era in low-cost housing dawns in Mesa when Escobedo at Verde Vista, 125 E. University Drive, hosts its grand opening 4-5 p.m. Wednesday, Dec. 4.

The ceremony will mark completion of the first phase of the development, which is replacing the abandoned World War II-era Escobedo Apartments with modern, rent-subidized units.

It was among three tax-credit-financed housing projects approved last year by the City Council and the Arizona state housing department. The others are a senior complex on First Avenue and apartments at the La Mesita Family Shelter on West Main Street.

Escobedo is a project of Save the Family Foundation and several partner organizations.

Solar-powered units, by Catherine Reagor, Arizona Republic, December 1, 2013

A housing development in Tempe called Gracie’s Village opened last week. The project, on Apache boulevard, along the Valley Metro light-rail line, has 50 affordable housing units above a thrift store.

All are solar-powered.

Developer Gorman & Co. worked with Grace Community Church of the Valley and the Arizona Housing Department to develop the three-story project.

Rental rates start at $394 a month for a one-bedroom apartment. Families earning $18,600 to $46,260 a year can rent at Gracie’s Village, which also has two-and three-bedroom apartments.

The development has a multipurpose room for before and after school care, a Wi-Fi Internet lounge, a roof deck, playground, picnic area, frontloading energy-efficient washer and dryers inside each unit, hard-surface flooring and electronically controlled entry.

$10 million in tax credits awarded for Nogales project

By Curt Prendergast Nogales International | August 14, 2013

What can you do with $10 million? For a local group looking to rejuvenate a downtown landmark, the answer is 48 units of affordable senior housing, with commercial and community spaces to boot.

The Bowman Senior Residences, formerly the Bowman Hotel, built a century ago, was awarded $1.03 million in tax credits from the Arizona Department of Housing on Aug. 1, credits that are renewed every year for the next decade, bringing the funding to a grand total of $10.25 million.

The award was announced at Wednesday’s regular meeting of the Nogales City Council by Yvonne Delgadillo, executive director of the Nogales Community Development Corporation, which has led the charge in searching for funding for the project.

“For us, it’s a huge accomplishment because as I’ve said, we’ve been working on it for seven years and it always seemed really difficult to identify the resources that were needed,” she said.

The finished project will combine the Bowman Hotel property with the De Anza property next door to create 48 units of housing for low-income seniors, with the bottom floor to be used for commercial and community spaces, she said.

“What does it mean to us as a community? It means that we’ll be able to secure the resources that we need for a project that we’ve been envisioning as a community,” she said.

Now that the funding has been secured, contracts to begin work on the project should be awarded by March 2014, she said.

Delgadillo thanked the city council for their support, saying “you guys were instrumental in this process. We really couldn’t have done it without the city’s support and without the community’s support.”

Not only was the funding a key part of realizing the project, it also showed that Nogales could compete with larger cities, she said, noting that only seven projects were awarded funding this year.

“What’s really neat is that a small community like Nogales was able to compete at the same caliber as Tucson and Phoenix projects that bring in millions of dollars are able to compete,” she said.

To secure the funding, the NCDC partnered with Gorman and Co., a Phoenix-based developer.

When all is said and done, the NCDC will own 51 percent of the project and Gorman and Co. will own 49 percent. Both worked together to secure the financing and that partnership will continue operating the residences, said Brian Swanton, of Gorman and Co.

How it works

So how will the NCDC and Gorman and Co. take those tax credits and turn them into money they can use?

The $1.03 million comes in the form of Low-Income Tax Credits (LIHTC), a federal program begun in 1986 that has provided $75 billion in tax credits to fund more than 2.5 million affordable rental homes, nearly all of the affordable housing projects in the U.S. built in that time.

Every year, the Bowman project will receive another $1.03 million in tax credits, which will be sold at a discount to investors, usually large banks, insurance companies, or corporations, Gorman said.

“They’ll buy them for anywhere from 80 to 95 cents on the dollar and then they get an annual tax credit in the amount of their allocation every year for 10 straight years,” Swanton said.

Investors in the Bowman project likely will pay 80 to 85 cents on the dollar, Delgadillo wrote in an email, which should generate at least $8.3 million, which she estimated would amount to about 80 percent of the project’s total cost.

As part of the LIHTC, the rent is restricted for 30 years and in the case of the Bowman Senior Residences, rent will be set at a rate that is affordable to seniors who earn less than 60 percent of the median income in Santa Cruz County, Swanton said.

The U.S. Department of the Treasury allots about $14 million annually to Arizona through the LIHTC program. In Arizona’s 3rd Congressional District, which includes Santa Cruz County, the tax credits have funded 5,627 apartments through $5.65 million in tax credits.

Mesa gets bit of boost in low-income housing

Ariz. to get 7 subsidized projects this year vs. 18 in 2012

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Ramiro Ibarra (left) and Jose Ibarra level gravel on a road at the site of a low-income housing project in Mesa.

Photos by Stacie Scott/The Republic

The northern side of University Drive near downtown Mesa used to be, figuratively speaking, the other side of the tracks.

Seventy years ago, Mesa chose the neighborhood as the site of its first low-income housing project financed with federal money.

During World War II, the low-slung bungalows housed airmen training at Falcon Field.

But after the war, the Escobedo Apartments reverted to their original purpose: providing roofs for many who otherwise wouldn’t have one.

Faced with a monumental bill to rehabilitate the decaying units, Mesa closed them in 2008. The tenants got vouchers for reduced rents in other quarters.

Now, Escobedo is being reborn.

You can still see many of the original units, fenced off and slowly crumbling. But others are gone, and in their place is the frame of a low-income complex called Escobedo at Verde Vista.

It’s happening because last year the Arizona Department of Housing included the complex among projects approved for federal tax-credit financing. This year, Escobedo’s second phase, which will add 62 units to the 70 under construction, also received funding.

Overall, the list of approved housing projects statewide — only seven — is far shorter than the 18 issued by the department last year.

And while last year’s projects included nine in the Phoenix metro area, this year there are only two, both in Mesa.

In addition to Escobedo, the department approved a 78-unit complex proposed by Scottsdale-based Algarve Partners on the site of an old motel at 950 W. Main St.

The Algarve Apartments complex will be adjacent to a light-rail extension under construction, complying with the housing department’s goal of building as many units as possible next to public transit.

These complexes, and others like them throughout the Valley, are built by private companies or non-profit agencies, rather than with public money.

But public money is involved because the companies receive tax breaks under a Reagan-era program designed to spur investment in affordable housing. The federal government issues a certain amount in tax credits each year, and the states decide which projects are worthy. This year, Arizona sifted 32 applications.

Rent at Escobedo will range from $256 for one-bedroom units to $824 for the most expensive four-bedroom models. The first residents are expected to arrive in late September.

“Without the tax credits, none of this would be remotely economically feasible,” said Brian Swanton, Arizona market president for Gorman & Co., which is building the Escobedo project.

Swanton said Escobedo and other tax-credit projects around the state won’t fill the demand for affordable housing.

Already, he said, 100 people are on the waiting list for Phase I without the company doing any marketing other than putting signs on the construction-site fence.

“I was surprised by all the demand,” Swanton said. “We will literally fill up overnight.”

Nationwide, he said, industry experts have estimated there is $25 billion in past-due capital needs for affordable housing.

“It’s a crisis,” Swanton said.

The disparity between last year’s long list of approved projects and this year’s short one was deliberate, Housing Department spokesman Daniel Romm said.

In 2012, the department beefed up the project list using 25 percent of the tax credits it knew would be available this year, he said.

“Our goal was to leverage our program to create immediate job growth,” Romm said. “As a result, we invested over $200 million in financing to fund 18 low-income rental projects, creating over 1,200 low-income rental units in seven counties.”

That, he said, “was the most ever funded in one year by ADOH.”

Those who received last year’s tax credits, which totaled more than $20 million, were required to speed up the construction timetable, and ground was broken for Escobedo and two other projects in Mesa late last fall.

Total investment in Escobedo at Verde Vista is estimated at $23 million.

It is being built under the auspices of the Save the Family Foundation, a Mesa charity created in 1988 to serve homeless families.

It partnered with other non-profits and Wisconsin-based Gorman, which specializes in affordable housing and urban redevelopment.

The project includes a new headquarters for Save the Family and a social-services campus on the southern side of University Drive.

In addition, four of the original bungalows are being preserved for historical purposes. They will house a fitness center, computer classes and other services for Escobedo’s new generation of residents.



Newly approved projects

These are the seven projects approved by the Arizona Department of Housing this year for tax-credit financing:

Amity Residences for Veterans, Tucson, 65 units.

Escobedo at Verde Vista Phase II, 125 E. University Drive, Mesa, 62 units.

Crossing Point Villas, Sierra Vista, 60 units.

WMAHA Homes VI, Fort Apache and Whiteriver, 46 units.

Algarve Apartments, 950 W. Main St., Mesa, 78 units.

Bowman Senior Residences, Nogales, 48 units.

Sun Ray Family Apartments, Douglas, 57 units.

Tax-credit program

The Tax Reform Act of 1986 changed how the federal government promotes low-income housing.

Rather than pay directly to build such projects, the government now gives tax breaks to entities willing to finance them privately.

The IRS divvies up a set amount of tax credits per year among the states, based on population. In Arizona, companies that want to build projects apply to the Arizona Department of Housing.

Winners don’t always have their own money for construction and may obtain funding from outside equity firms. The sponsoring organization then sells the tax credits to the equity companies, making the equity companies eligible for tax credits each year for 10 years.

The tax credits lower the overall cost of building a project, making the apartments more affordable.

The tax-credit program does have some critics. The Cato Institute, a libertarian think tank, opposes it and says on its website, “The low-income housing tax-credit program provides large subsidies to developers and few, if any, benefits to low-income families.”