File photo The affordable housing ordinance’s failure — more than 58 percent of voters disapproved — has left a gap in funding that will now have to fill to accomplish the proposed project.
While the Affordable Housing Ordinance died at the polls Tuesday, a proposed project to redevelop Hotel Clovis isn’t off the table.
Tax credits allocated for the project still belong to Tierra Realty LLC and developer Stephen Crozier, said Dan Foster, New Mexico’s Mortgage Finance Authority’s tax credit program manager.
But Crozier has to soon show MFA he can do the project or he will lose the credits.
Crozier’s plan to convert the abandoned Hotel Clovis building into low-income housing units was predicated on receiving up to $1.4 million in grants and loans from the city of Clovis, Foster said.
While the AH ordinance wasn’t about redeveloping Hotel Clovis, the hotel project was tied to the ordinance, officials have said.
The ordinance — which would have allowed the city to reduce permitting fees, donate condemned property and in some cases give grants or loans to private developers — was aimed at trying to encourage development of affordable housing in what has been described as a tight rental market.
Officials say the need for housing for Cannon Air Force Base personnel and low-income workers is great and isn’t being addressed by private developers because of the economy.
The city cannot loan or grant money to a private individual because of a state anti-donation clause.
The ordinance voters rejected would have created an exception and permitted such loans and grants in specified development projects in the downtown area.
The ordinance’s failure — more than 58 percent of voters disapproved — has left Crozier with a gap in his funding that he will now have to fill to accomplish the proposed project.
Crozier has not to responded to multiple requests for interviews. Clovis Mayor Gayla Brumfield said Crozier was “very disappointed” in the election outcome. But Brumfield said she thinks he will try to move forward with the project.
“I don’t know exactly what he’s going to do. He has a lot of time and money and energy invested in it,” she said.
While Foster said there is no set date when MFA will rescind Crozier’s tax credits and award them to someone else, he said it needs to be resolved before the end of August.
“We do have the ability right now to cancel that tax credit reservation. … There is some amount of urgency because if we’re not able to get those tax credits to the next project then they won’t be able to move forward either,” Foster said.
“Mr. Crozier just has to demonstrate to us that that project is still feasible and he can move forward with it. He’d indicated to (the deputy director of programs) that he still planned to move forward and what I need to know is how.”
Foster said the tax credits are allocated at the beginning of a project, but they are only awarded once a project is completed. For currently allocated credits, the deadline for project completion is Dec. 31, 2012.
That doesn’t leave much time for Crozier — or for another developer if the credits are handed down to the next applicant on the list for the highly coveted credits — to complete a major construction project.
“It’s already getting to be a tight timeline. I think that Mr. Crozier is very experienced and I think he can pull it off, but it would have to start moving forward fairly soon,” Foster said.
When Crozier was allocated the credits, he negotiated transference of them to investors in exchange for capital for the project, Foster said, which is how credits are used to fund projects.
He could try to renegotiate those rates with his investors to get more equity, or he could try to shave costs off the project. However if Crozier tries to reduce costs, he must do so while still meeting commitments he made to MFA to construct at a high environmental standard and he must adhere to guidelines attached to historic restoration credits he was allocated, Foster said.
“The world just changed on us, though,” Foster said. “We’ve all been looking at this deal (and) all our feasibility analysis was really predicated on the Affordable Housing Ordinance being passed.”