After delays, affordable housing developer says Carson City groundbreaking to happen soon
Submitted by Kelsey Penrose on Thu, 08/04/2022 - 10:07am
The Carson City Board of Supervisors agreed by a 4-1 vote Thursday to a subordination agreement for the affordable housing project Sierra Flats so that developers could acquire loan funding to complete the project.
The portion of the project being discussed was Phase 1, which developers hope to have a groundbreaking for near the end of the month once additional funding has been secured.
The project area is off of Airport Road and Butti Way. Michael Snodgrass, representing the developers, stated there would be an 18 month maximum for the construction period.
“Its hard right now — part of the delays have been that interest rates have gone up nationwide, a lot of projects got caught in this,” said Snodgrass. “We’re looking to move as quickly as possible.”
Snodgrass also stated that they are still seeking bids for the project, especially for heating and cooling bids.
The project is in final permitting now, and Snodgrass hopes to have a closing date of August 26.
With the agreement to subordinate the project, there is a risk that, if the developers should miss construction deadlines and default, the city would not be able to have the property revert to them, as the lender would be in charge of the property.
However, Supervisor Stacey Giomi stated that while defaulting is unlikely, the affordable housing project designation for the property would still be protected.
“I think the risk is minimal but with the restrictive covenants, even if they default, which is not likely, the land can only be used for what we’ve declared it to be used for, so the bank will have to negotiate with someone for completion,” said Supervisor Giomi.
Giomi also stated that, if the project were to default, the city could simply bond and repurchase the property to “sell” it again to another developer.
Mayor Lori Bagwell stated that finding landlords willing to accept HUD voucher is almost impossible.
“They are readily available, and we have hundreds of them in Carson City that have been granted, but there are no landlords who accept them,” said Bagwell. “The reason is the fair market rents that are on there for that price tag, is no where near what the landlord can get. They’re not willing to do it.”
Bagwell stated it takes a project aimed at taking vouchers and sliding scales.
“They need help to get done,” said Bagwell. “On the spectrum, we have hundreds of people that need help. We do have assistance to give them, but we need to have a willing person on the other end to take that voucher.”
Supervisor Maurice White was the only supervisor to not support the project.
“While I have no objection to this project in general, I continue to object to the gifting of the taxpayers’ property, and I will not be supporting this agenda item,” said White.
