Tax abatement approved for $5.8M workforce housingSeptember 13, 2017
By CANDY NEAL
HUNTINGBURG — The former Wagon Works site at 419 N. Washington Street now has the tax abatement needed for workforce housing to be constructed on the site.
Now, housing developers need to pursue tax credits for the project to come to fruition.
The Huntingburg Common Council declared the former Wagon Works site as an economic revitalization area Tuesday and approved Paragus Group’s tax abatement request. The Indianapolis company is planning to construct a $5.8-million, 56-unit housing development on the site.
The abatement, recommended by the Huntingburg Economic Development Commission, is for 10 years at 100 percent of the property taxes for each year. Currently, the abatement will total about $28,000 annually, Paragus representatives have said. The total 10-year abatement has been capped at $325,000, so any property taxes over that will be paid.
Paragus hopes to get some of the $1.5 million in rental housing tax credits that have been designated for use by Stellar Communities, of which Huntingburg is one. Two new communities will be designated as Stellar Communities later this year, and could be eligible for the same credits if they have a project ready and an application to submit, said Gary Ritz of Paragus.
Paragus’ application, requesting $550,000 to $650,000 in credits, will be submitted to the Indiana Housing & Community Development Authority by Nov. 6. Paragus will find out on Feb. 15 if the project was approved for the credits.
The housing site was rezoned from heavy industrial to light commercial last month, to allow the housing to be built.
The development will have 28 studio, 24 one-bedroom and four two-bedroom apartments in three housing units on the site; an additional building on the site will have a community room. The site will have bike racks, a fenced dog-walking area, a picnic area, a parking space for each apartment and on-site management. Each apartment will have curtains or blinds; a porch, patio or balcony; a garbage disposal; dishwasher; and hookups for cable and for a washer and dryer.
Rent has been estimated at between $230 and $390 for a studio apartment, $470 to $530 for a one-bedroom apartment and $600 for a two-bedroom apartment. The smaller studio apartments will be 468 square feet and the larger ones will be 572 square feet. The smaller one-bedroom apartments will be 728 square feet and the larger ones will be 832 square feet. The two-bedroom apartments will be 936 square feet. Residents will be responsible for their own utilities, which is just electric, and the owner will provide trash service.
The amount of rent for the apartments is limited based on state standards for the tax credits. Restrictions also dictate that an apartment can have only two people per bedroom. So the number of people living in a studio or one-bedroom is limited to two people and the number allowed to live in a two-bedroom apartment is four people.
Tenants’ income is also limited by state standards. As of May 1, the maximum verifiable income is $28,440 for one person, $32,520 for two people, $36,600 for three people and $40,620 for four people.
The council amended the city’s downtown revitalization plan Tuesday to specifically say that workforce housing is needed in the area surrounded by First, Chestnut, Seventh and Shelby streets; that area includes the Paragus project site.
Council members also agreed to consider vacating Elm Street, which runs through the middle of the property, if the project continues to move forward. With that, Paragus agreed that it will give enough land east of the site to construct a new Elm Street and go through the formal process of requesting the city to vacate the current Elm Street, said Bill Kaiser, Paragus’ attorney.
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