Truckee Artist Lofts experience setback
More than a year after the Truckee Planning Commission moved to fast track the $28.5 million affordable housing project, dubbed the Truckee Artist Lofts, the project continues to be delayed because it did not receive a key tax credit—again.
Truckee Town Council voted unanimously on Tuesday, June 13, to approve an extension of its $1.4 million loan to the Artist Lofts project so that the developer could reapply for the 9 percent tax credit to build the project.
Council initially granted a $1.3 million loan in May 2016 to help bolster the project’s score in the June 2016 tax credit application cycle, but the project did not score high enough in that round to receive the credit.
As the Sierra Sun previously reported, council approved a $100,000 increase to that loan in February in an effort to make the project more competitive in the next tax credit application process, which occurred in March. Again, the project didn’t receive the credit.
“An allocation of Tax Credits from the State of California is a critical component of this project’s financing, as it will enable us to bring over $20 million of equity to the development,” said CFY Development Vice President Ali Youssefi in a June 1 letter to Truckee Town Manager Tony Lashbrook.
CFY Development is the company attempting to develop the lofts.
The decision made by council doesn’t grant any new funds to the project, Town Manager Tony Lashbrook said, but it does provide an extension of the loan so that the developer may apply for the 9 percent credit in the June application cycle.
The California Low-Income Housing Tax Credit program lowers what businesses owe in taxes if they invest in low-income housing. Without the credits, projects often don’t pencil out since the cost to build them is greater than the return on investment. In other words, the cost to build affordable housing is often greater than what the units can be rented for while still remaining affordable.
Projects are scored on a variety of criteria in the application process, and the projects with the highest scores are awarded credits.
The Artist Lofts project was considered for the state’s 9 percent tax credit in the “Rural Set Aside” category for the last two application cycles, and was denied.
Since the shortage of affordable homes is a problem across the state, there are many applications and few credits available.
According to Youssefi’s letter, the project was one of 18 others in the rural category during the March 2017 application cycle. Only six were given the credit.
“While we are disappointed that we were not awarded an allocation of tax credits in our first two attempts, we are committed to financing and constructing this project,” he said in the letter.
The Truckee Artists Lofts project consists of 77 residential rental units, with 66 of those restricted to low-income and extremely low-income tenants. One unit will be reserved for manager, and the remaining 10 will be priced at market-rate.
The homes are the first of three phases in the larger Truckee Redevelopment Master Plan, which includes a 3-screen movie theater, live amphitheater, and retail as well as commercial space on the site of the former Truckee Rail Yard at property in the downtown district.
Amanda Rhoades is a news, environment and business reporter for the Sierra Sun. She can be reached at firstname.lastname@example.org of 530-550-2653. Follow her on Facebook, Twitter and Instagram @akrhoades.