Having signed a purchase agreement last spring to acquire Seasons Park Apartments, an affordable-housing preservation group is receiving financial assistance from Richfield Housing and Redevelopment Authority.
In order to help keep rents down while improving the property, the HRA voted unanimously Aug. 21 to issue a $150,000 no-interest loan to Aeon, a nonprofit that signed a purchase agreement in April to keep the 422-unit property out of the hands of a developer that, according to the fears of affordable-housing advocates, would have forced out a multitude of low-income residents.
The loan will help Aeon qualify for a special property tax status – called 4d – that applies to low-income rental housing, according to Community Development Director John Stark. Aeon’s goal is to rent all units at Seasons Park at levels affordable to tenants who earn 60 percent of the area median income, according to Blake Hopkins, a project manager at Aeon.
Currently, rents at the property are affordable for tenants making between 50 and 54 percent of the area median income, Hopkins said. But work is needed to enhance living conditions at Seasons Park, he added.
Problems in grading have caused flooding in several garden-level units, Hopkins said. The multi-building complex also needs new carpeting and painting in common areas, plus improvements to kitchens inside units, while mold and mildew issues must be addressed in the garden units that have been flooded, Hopkins summarized. Roofs and windows will also need to be addressed in the next three to four years, he said. The work is part of a 20-year property assessment plan.
The safety of Seasons Park residents is another priority. City Manager Steve Devich championed the institution of criminal background checks that will “make that complex as safe as it possibly can be.”
Hopkins, too, acknowledged a need to emphasize safety at the property.
“We have heard from some residents that there is a concern for safety at the site,” he said.
In Aeon’s background checks, any felonies in the previous five years would trigger a denial for a prospective renter, Hopkins said. Three or more gross misdemeanors or felonies in the previous 10 years would also keep a renter out, he added.
Hopkins also noted the challenge of balancing safety with a social responsibility to provide adequate housing even to people with criminal backgrounds, an acknowledgement that came after HRA Commissioner Doris Rubenstein raised her moral concerns.
“Probably their biggest impediment to re-entering society as contributing citizens is the fact that they’re excluded from virtually all forms of housing,” Rubenstein said, hoping action on the matter can be taken on the state level. “This is real a stain on our society, that people who have paid their dues, who have gone through their probation … are still excluded 10 years later from finding stable housing.”
In addition to the loan that was approved last week, municipal staff are recommending that the city issues financial assistance to Aeon in the years to come. The recommendation includes the Richfield Economic Development Authority issuing Aeon a $100,000 forgivable loan next year to help rehabilitate apartment units at Seasons Park.
“This funding is anticipated to be part of an annual program, and Aeon would be invited to apply again in 2019 along with any other eligible entities,” says a staff report prepared for the HRA.
Mayor and HRA Commissioner Pat Elliott endorsed the $150,000 loan that the HRA approved last week, but was hesitant to promise future aid.
“In terms of offering financial assistance and everything, I have no problems with that,” Elliott said.
He added, however, “I’m not sure how often you can come back to the well and expect us to have money to make sure you can continue to service the debt and keep the maintenance up.”
Hopkins was confident, due to financial arrangements that include a low-interest $22.4 million loan from Fannie Mae, that Seasons Park will stay financially solvent.
Councilmember and HRA Commissioner Michael Howard deemed the $150,000 loan “a reasonable amount,” especially compared to the scenario that was avoided when Aeon signed the purchase agreement.
It was determined that approximately 200 public-school students would have been displaced if the complex had been purchased by a developer with plans to renovate, causing a staggering funding impact for the Richfield School District, Howard noted.
In helping Aeon secure 4d property tax status by issuing the loan, the city of Richfield is losing an estimated $39,000 in tax revenue, according to John Stark.
Aeon is scheduled to officially become the new owner of Seasons Park, currently held by Colorado-based Forum Real Estate Group, at a Sept. 7 closing.
Follow Andrew Wig on Twitter @RISunCurrent.