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Low-income housing for seniors approved

FWHA goes ahead with project despite city’s concerns

– The Fort Wayne Housing Authority is moving ahead on its South Side Senior Villas project without the help of the city of Fort Wayne.

The city had awarded the $1.9 million project to build a complex to house up to 32 low-income seniors a $300,000 loan through the federal HOME program.

FWHA Executive Director Maynard Scales said the agency was set to close on the financing package last week, but city officials suddenly started raising questions, asked whether there was another source of funding and said FWHA needed to start the process over and reapply for the funds.

“These were all things we thought were resolved,” Scales said, noting that numerous other agencies had already signed off on the project planned for 7200 John St. It will be similar to the Village at Brooklyn Pointe off Nuttman Avenue.

Scales said city concerns seemed to revolve around the plan to use a limited liability corporation to own the complex, which he said is a standard practice across the country. The LLC would be a owned by FWHA but would limit the agency’s liability to the assets owned by the LLC.

Because costs are already increasing – construction has already been delayed nearly six months – Scales recommended the FWHA board vote to use surplus funds the agency has on hand in another account to begin the project without the money from the city. The board voted unanimously to use its own $325,000 to make up for the loss of funding and cover increased costs from the delays already experienced.

“It was last minute; it was totally unexpected,” Scales said.

But city officials said they did not pull the funding.

Heather Presley-Cowen, deputy director of community development for the city, said Wednesday that because FWHA has made so many changes to the project – including wanting to change the funding from a forgivable loan to a grant and adding a third-party LLC to own the complex – that they just needed a new application filled out so they had everything current and in writing. Presley-Cowen said the process would take only 10 days.

“I don’t know why they don’t want to give us up-to-date information,” Presley-Cowen said.

Presley-Cowen said the city issued an award letter for the money in June, a letter that is still in force. But the city cannot give FWHA money for it to give to a third-party LLC that is not listed in any of the documents for the loan.

“It was never included in even the most recent update in April,” she said. “And they wanted us to convert it to a grant.”

Scales told the FWHA board he expected that if FWHA did reapply for the money, it would be denied. Presley-Cowen said she has no idea why he would think that, since the award letter is still in force.

“We were ready to re-underwrite it and get it funded,” she said. “That assumption (that the funding will be denied) is wrong.”

Presley-Cowen said using an LLC is not a problem, but it has to be documented for auditors from the federal Housing and Urban Development department.

“We’re not scared by third parties, but I’ve got to have the documentation and be able to prove to HUD the funds were used correctly,” she said. “Otherwise, we could have to repay $300,000 to the federal government, and that’s a position no city wants to be in.”

When FWHA board member Andy Downs asked Scales if he thought there was any chance the money would come through, Scales said there was not.

“Is there really a point in resubmitting (the application) to the city? Is there a point in going down that road?” Downs asked.

“As much as it pains me to say,” Scales answered, “no.”

Presley-Cowen said the agency just turned down a 20-year forgivable loan for no reason.

“That’s unfortunate,” she said.