Background:
Each year, the U.S. Department of Housing and Urban Development (HUD) allocates HOME Investment Partnership (HOME) funding to the City. HOME funds have to be spent on housing projects/activities that benefit households at or below certain income levels and must be allocated on an ongoing basis or be repaid to HUD.
The project, proposed by developer Newbury Living (West Des Moines), involves the rehabilitation of the existing historic office building placed in service in 1958. It is a significant example of mid-century modern design by Walter Kruse who had a familial connection with the Davenport architectural firm known at the time as Clausen & Kruse. The building was constructed by Priester Construction (another Davenport company) which then used the building to house their office space.
The developer has proposed the repurposing from office space to thirty-four residential units. They will be efficiency and one-bedroom units designed primarily to be rented at market rates. The proposal includes seven of the units to be funded by State HOME funds in the amount of $1,000,000 with an additional four units to be assisted by City HOME funds for a total of eleven affordable units at 80% of Median Family Income, which is approximately $42,250 for a single person.
To assist with a financing gap, a $635,695 loan in HOME funding is proposed for the project and reflected in the draft Development Agreement.
Pending approval of the final underwriting, environmental review, and availability of funding, approval of the Development Agreement will authorize staff to execute the appropriate documents to commit the above sources of funding. The developer anticipates beginning site work by July 2021 and hopes to be completed by August 2022.