Archive for the ‘Public Housing’ Category
October 7, 2013
The Sears Crosstown Project
I am old enough to remember going to the Curb Market in crosstown with my mother and buying a bushel of snap beans for canning. I would have to spend the rest of the day cleaning and preparing them. On many occasions we then went to the Sears Crosstown store. It was huge and impressive. It was built for a certain time and market and whether it paid for itself over time I do not know. Looking at the Sears Company today, you have to wonder about their long term business knowledge. The Sears catalog was the amazon of its day and this store I believe was a catalog sales and warehouse center. Too bad they did not keep up with technology.
Now we have a choice. Tear down the old Sears building or spend at least $175 million to turn it into another Robert Lipscomb non tax producing renovation project. Where is the financial pro forma report on this project? If it is available I would like to see it.
Meanwhile let us look at how this is currently being financed according to a recent CA report.The Crosstown Development team says it has essentially assured $160 million in
funding — $25 million raised privately, $30 million in historic preservation tax credits,
$15 million in new market tax credits, $10 million in grants and other sources, and an
$80 million loan. Add the $15 million requested from the City of Memphis and you have the $175 million supposed front end cost.
- $30 million in historic preservation tax credits. The legislative incentive program to encourage the preservation of “historical buildings”. Congress instituted a two-tier Tax Credit incentive under the 1986 Tax Reform Act. A 20% credit is available for the rehabilitation of historical buildings and a 10% credit is available for non-historic buildings, which were first placed in service before 1936. Benefits are derived from tax credits in the year the property is placed in service, cash flow over 6 years and repurchase options in year six.
- $15 million in new market tax credits. The New Markets Tax Credit (NMTC) Program was established in 2000 as part of the Community Renewal Tax Relief Act of 2000. The goal of the program is to spur revitalization efforts of low-income and impoverished communities across the United States and Territories. The NMTC Program provides tax credit incentives to investors for equity investments in certified Community Development Entities, which invest in low-income communities. The credit equals 39% of the investment paid out (5% in each of the first three years, then 6% in the final four years, for a total of 39%) over seven years (more accurately, six years and one day of the seventh year) . A Community Development Entity must have a primary mission of investing in low-income communities and persons.
If it goes forward, will it throw off tax money to the City of Memphis? If there are new small businesses that rent space or locate in the general area because of new traffic and people who live in the renovated building, I suppose there could be new sales tax money and employment opportunities. However it sounds like most of the occupiers of the space will be non-profits and art enterprises. There will be people living in the building but many of these will be rent subsidized people under section 8 or other federal and state programs. Taxpayers will be funding the whole project funded through these various federal tax credits.
As far as the building is concerned, I think it is ugly and really not worth saving. Possibly the architects can make it beautiful but at what cost compared to tearing it down and doing something else? I would like to see a financial analysis of this proposed project and no decision should go forward without this being presented to the public for discussion.
January 28, 2013
As we discuss paying for local government with property taxes, sales taxes, fees, penalties, income taxes, capital gain taxes, etc. etc. and on and on, I decided to look into the cost of housing assistance. I went to the Memphis Housing Authority site and found a document on eligibility as shown below.
- You are 18 or over; AND
- Your family earns less than 50% of the Area Median Income, ($28,650 a year), AND
- You have lived in Shelby County for at least one year, AND
- You want to rent an apartment within Shelby County, AND
- You are a United States Citizen OR an eligible immigrant, AND
- Your household’s members are all citizens or eligible immigrants, which includes permanent residents and lawful temporary residents.
I then decided to ask for financial statements on a local public housing site, University Place on Lamar near Crump Blvd. This was the site of the old Lamar Terrace. I have attached three financial documents about the three phases of the development, University Place Southeast, University Place II and University Place III. (more…)
December 17, 2012
I went to a Community Redevelopment Agency meeting recently at City Hall and about 50 members of the public were present prepared to discuss and protest the Heritage Trails redevelopment proposal put forth by Robert Lipscomb. He failed to show up. You ask yourself, who is Robert Lipscomb? Good question.
I recently published an article about a local housing scam, flipping one house three times in several years and making over $600,000 on the deals. I asked why the Commercial Appeal had not published any detailed news of this. I sent the information on to the authorities for investigation and hopefully prosecution. Well, these scam artists have finally been indicted. (See the indictments below and a national article on housing scams, especially Memphis). (more…)