ST. LOUIS 鈥 The city鈥檚 economic development office on Friday tapped a group to administer a new $15 million housing fund meant to boost new construction and homeownership in north 最新杏吧原创 and other neighborhoods that have long struggled to attract new investment.
A 最新杏吧原创 Development Corp. committee voted to enter into contract negotiations with a joint venture dubbed Beyond the Bridge. If finalized, the entity would be the master developer of a revolving fund seeded with $10 million in American Rescue Plan Act funds and $5 million raised from federal New Markets Tax Credits to finance housing construction and mortgages in the city鈥檚 low-income areas.
鈥淚n order for this city to grow, to achieve equitable economic growth, it will require our local officials ... to no longer be passive but active partners with developers and community-based organizations to rebuild our historically underserved neighborhoods,鈥 SLDC Director Neal Richardson said after announcing the selection Friday.
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The Beyond the Bridge joint venture includes , a community development corporation that has historically worked in the Forest Park Southeast and Central West End neighborhoods but in recent years has branched out to support neighborhoods such as Fountain Park and Academy north of Delmar Boulevard.
Also part of the venture is , the largest nonprofit community development financial institution in the Midwest, with offices in 最新杏吧原创, Chicago and Kansas City.
, a locally based consultant that administers and structures the complex financial transactions needed to use New Markets Tax Credits, is the third entity involved in the joint venture.
The group beat out proposals from Rise Community Development and Urban Strategies, local community development nonprofits.
SLDC鈥檚 plan to use some of its regular allocation of federal new market tax credits to finance owner-occupied housing is a new approach for the organization. That鈥檚 where Smith NMTC comes in. The firm, which works closely with U.S. Bank on the new markets deals, has refined a model to finance for-sale affordable housing. It has worked with Habitat for Humanity to build about 5,000 housing units over the past 13 years, including about 150 in the 最新杏吧原创 region.
Howard Smith, the firm鈥檚 principal, said it takes some time to get organizations comfortable with using the federal credits for owner-occupied housing development.
鈥淧eople always say I never knew you could use this for housing,鈥 he said in an interview. 鈥淚t鈥檚 a process to get everyone comfortable because no one wants to risk losing their (New Markets) allocation.鈥
SLDC鈥檚 director of New Markets Tax Credits, Bill Seddon, said he was excited about the new approach.
鈥淚t鈥檚 a stretch for us on the New Markets side, but I think it鈥檚 a great opportunity,鈥 Seddon said. 鈥淚鈥檓 excited to work with the Smith folks, and I think this will make a big impact going forward.鈥
After a contract is hammered out with the joint venture, those groups and the city will work to find sub-developers and locations for housing, with an eye to rehab and infill whole blocks rather than sprinkling the effort over too large of an area. The mortgage lending component, officials hope, will help spark a housing market in neighborhoods that banks avoid, sometimes citing a lack of comparable sales needed to underwrite loans.
Richardson has also said the program will recruit minority- and women-owned sub-developers and contractors in an effort to grow capacity among minority-owned businesses in the city.
SLDC documents have said the initial round could finance some 200 houses, but officials hope the fund can become self-sustaining and continue building and financing homes for years.
The $10 million in federal ARPA money comes from $20 million the 最新杏吧原创 Board of Aldermen allocated for housing development. When the appropriation was debated over the summer, Mayor Tishaura O. Jones questioned whether Board of Aldermen President Lewis Reed鈥檚 proposed allocation would violate federal rules, leading to weeks of political clashes.
(The Treasury Department that municipal ARPA funds can be used to address vacant property and develop affordable housing in low-income areas.)
Despite the political clashes over the summer, the Jones administration and Reed鈥檚 office appear on the same page now. Maurice Falls, a selection committee member and Reed鈥檚 director of operations, commended Richardson 鈥 Jones鈥 pick to lead SLDC 鈥 on the process to find a housing fund operator.
鈥淭his is a historical opportunity for the city of 最新杏吧原创 moving forward, especially with minorities and their ability to engage and rebuild their city,鈥 Falls said.
