The private development partner of the Durham Housing Authority has been awarded nearly $15 million in new federal tax credits, pumping additional resources into the public agency's extensive East Durham redevelopment effort.
The Community Builders Inc., a Boston-based nonprofit corporation, will use the tax credits to draw other private investors to the Durham project, which aims to build 415 single-family homes and apartment units in one of the Bull City's poorest neighborhoods. The tax credits are valued at nearly $1.5 million a year for 10 years.
The housing authority was awarded a $35 million Hope VI grant five years ago to replace the now-demolished Few Gardens public housing complex. The agency has partnered with the private company to build and manage the new properties.
The Community Builders plans to leverage the federal grants and the new low-income tax credits to secure loans and private investment, increasing the Durham redevelopment project's total budget to $82 million.
The tax credits had always been counted on in the budget planning. But last year, as Hope VI construction lagged because of management upheavals at the financially troubled housing authority, Durham was passed over for the tax credits. The Community Builders reapplied for the credits this year, as the project got back on track.
Tom Davis, the senior project manager for The Community Builders assigned to Durham, expressed some relief that the tax credits are in place. As a tax-exempt organization, the nonprofit company will not use the credits itself, but will trade them to for-profit companies that can benefit.
"Major financial players are very interested in investing in communities with these tax credits," Davis said. "Typically, we get cold calls from potential investors when an award like this is announced. This award should allow us to attract over $11.5 million in private investment."
In addition to the tax credits, the N.C. Housing Finance Agency has earmarked an additional $1.5 million in state money to support future phases of the Hope VI redevelopment.
The first 43 homes built with the federal grant money were completed late in 2004. Another 100 units are to be done by the end of this year, with the whole project scheduled for completion by December 2007.
Staff writer Michael Biesecker can be reached at 956-2421 or firstname.lastname@example.org.