Tax credits sought for Courtyard Apts. upgrade

Community Action Partnership of Northwest Montana is vying for state housing tax credits that would enable the agency to undertake a major renovation of its Courtyard Apartments on Airport Road in Kalispell.

The project is valued at $4.7 million in total development costs, which includes both the renovation of the 32-unit apartment complex and “soft” costs that include architect, engineering and legal expenses, according to Marney McCleary, housing director for Community Action Partnership.

The Courtyard Apartments were built in 1995 as a partnership project between the city of Kalispell and the nonprofit Community Action Partnership. It serves a mix of residents who meet the low-income threshold, including single parents, seniors, people with disabilities and veterans.

Rotting window sills, worn-out cabinets and outdated heating systems are among the deficiencies at the apartment complex. If the tax credits are approved, the rehabilitation would be wide-ranging, from adding new insulation and new roofing to installing energy-efficient windows and replacing non-code-compliant exterior stairways with stairs that can better withstand harsh winter weather.

A new addition to one of the four Courtyard buildings would provide a community room, on-site management offices and a larger laundry facility. Green building initiatives and various energy and water conservation measures are planned.

The cost per apartment for the rehabilitation is $148,180. McCleary said it would be much more expensive to build new low-income housing than to refurbish the existing housing stock.

Tenants would be relocated to other housing facilities temporarily for the duration of the Courtyard rehabilitation if the funding is approved.

McCleary said the agency has been working for five years to obtain the financing needed to rehabilitate the Courtyard Apartments, but has been unsuccessful in getting the government tax credits needed to afford the upgrades. An application for the upgrades in 2012 was denied.

“We’ve attempted to make the numbers work with other types” of financing programs, but nothing has worked so far, McCleary said. Because so much rehabilitation is needed, the only assistance that is viable for the Courtyard Apartments is the 9 percent tax credit available through the Montana Board of Housing for facilities that need substantial rehabilitation of existing units.

“Conventional financing doesn’t pencil out” for Courtyard, McCleary said.

Without tax credits valued at $353,927, the rehabilitation can’t move forward.

The credit is intended to equal 70 percent of the costs of constructing new low-income housing or 30 percent of the cost of acquiring existing housing. To accomplish this, the credit provides tax benefits each year for 10 years that are equal to about 9 percent of the project cost for new housing or 4 percent of the acquisition cost for existing housing, McCleary explained.

The Montana Board of Housing, which administers the low income housing tax credit program for Montana, will meet Jan. 19 to determine which housing projects get the low-income housing tax credits.

This year’s allocation process is highly competitive, McCleary acknowledged, with 21 applications statewide and a pool of tax credits big enough to fund only a relatively small number of projects.

Community Action Partnership, which is working with the Rural Community Assistance Corp. on the Courtyard project, made a presentation for the project in October and will answer any final questions from the Board of Housing at the board’s Jan. 19 session.

In addition to the Courtyard project, the Community Action Partnership is working to acquire several other housing properties in Northwest Montana, including a 54-unit senior and disabled housing complex in Kalispell; the 32-unit Treasure Manor senior housing facility in Libby and some smaller properties in Sanders County, McCleary said.

The agency is bundling those properties to get the non-competitive 4 percent tax credit to acquire and rehabilitate the various housing complexes.

Community Action Partnership already owns the 20-unit Teakettle Vista I facility in Columbia Falls and the 24-unit Westgate Senior complex in Kalispell and is looking to preserve and recapitalize those facilities, too.

The price tag for acquisition and rehabilitation is $22 million for all of the properties, McCleary said.

Features editor Lynnette Hintze may be reached at 758-4421 or by email at lhintze@dailyinterlake.com.