DANCO's Harbor Point Senior Housing Project has been in the works since 2015. | screenshot

Previously:

• State Housing Funds Present Another Opportunity for DANCO-Led Senior Apartments Project in Crescent City

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Crescent City councilors and DANCO Community Partners hope that a $5 million grant win will help secure the tax credits needed to finally get a low-income senior housing project off the ground.

Councilors on Monday unanimously approved a development and disposition agreement with the Arcata-based affordable housing developer to build a 27-unit three-story complex at 655 H Street, the old El Patio Motel site.

This is the city’s second development and disposition agreement with DANCO. DANCO will use its recent $5 million Permanent Local Housing Allocation award, plus 26 project-based housing vouchers the Crescent City Housing Authority provided, to leverage its chances of receiving low-income tax credits, according to Project Manager McKenzie Dibble.

DANCO will apply for that tax credit financing on Aug. 8, she told Councilors.

“This project has a 60 percent tiebreaker for the tax credit program, and in our experience, this is a really strong score,” Dibble told City Councilors. “We believe we’ll have a good chance at being able to secure tax credits in this round. If the project is successful in this round, the tax credits will be formally awarded on Nov. 8 and then we would have six months to pull building permits and close on the construction financing  for the deal.”

The Harbor Point Senior Housing Project would consist of 26 affordable housing units — 23 one-bedroom units and three two-bedroom units — and a unit for an on-site manager, Dibble said. The units would be rented to seniors who are at or below 60 percent of the area median income for Del Norte County.

If DANCO does receive tax credits, construction would take about 12 to 15 months with the senior housing complex for lease in 2025, Dibble said. If DANCO is unsuccessful at getting those tax credits, tac credits will be offered again in the spring and summer of 2024, Dibble said.

Efforts by DANCO and Crescent City to build Harbor Point date back to their original development and disposition agreement in 2015. The city had been hanging onto the motel property since it acquired the parcel through the redevelopment agency back in 2011, according to City Manager Eric Wier.

After Councilors approved the original DDA, DANCO tried for tax credits but were unsuccessful, according to Wier. In 2017, the Crescent City Housing Authority allocated 26 project-based housing vouchers in the hopes that another attempt at tax credits would succeed, but “it wasn’t quite successful enough,” Wier told Councilors on Monday.

The development and disposition agreement with DANCO is necessary for the project to receive tax credits, Wier said. The City Council also approved a resolution to declare the 655 H Street property to be exempt surplus, which allows it to be transferred to DANCO without a competitive process.

According to the Surplus Land Act, properties that will be the site of affordable housing projects are included in the state’s list of exempt surplus properties.

“As far as the DDA goes, the DDA is basically having the city agree to sell the property for the appraised value. It was appraised last year at $160,000 — that would be the value of it,” Wier told councilors. “You would agree that the developer would pay $750,000 in impact fees. This is something they proposed to us. We haven’t assessed these impact fees on other projects, but there are going to be impacts to the city with this project coming through.”

According to Wier, DANCO will agree to pay the $910,000 in development impact fees and the property’s purchase price over 55 years at 3 percent interest. The project’s total development cost is $9.8 million.

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