Housing project rehab advances

PROVIDENCE — The Rhode Island Housing Board of Commissioners on Thursday approved a financing package for the phased $12.3-million rehabilitation of the Prospect Heights housing development at 560 Prospect Street in Pawtucket.

Built by the Pawtucket Housing Authority between 1941 and 1942, the 292-unit complex “is significant as Pawtucket’s first and only New Deal-era, federally funded public housing project,” according to a Rhode Island Housing staff report. “It comprises 36 brick and concrete block buildings set on a 21-acre lot at the intersection of Prospect Street and Beverage Hill Avenue in Pawtucket.”

Tax credits, including 4 percent and 9 percent federal low-income housing tax credits, federal historic tax credits and $3.2 million in state Rebuild Rhode Island tax credits, are all part of the complex financing deal. Rhode Island Housing first gave financing approval in May 2016. “The rehabilitation budget increased slightly since firm approval to include potential lead and asbestos remediation,” the report stated.

The board on Thursday approved a $4.7-million tax exempt construction loan and a $1.7-million tax exempt permanent loan.

A joint venture between WinnDevelopment and Omni Development Corp. will redevelop Prospect Heights in two phases; 101 apartments will be completed in the first phase, scheduled to start in the spring.

“In conjunction with the Pawtucket Housing Authority, Winn/Omni applied to HUD for assistance under the Rental Assistance Demonstration (RAD) program in December 2014. RAD is HUD’s primary program for addressing aging public housing,” the report added.

The agency report also explained that because public housing agencies are not allowed to use operating funds for debt service, their ability to make repairs is limited. But RAD “allows housing authorities to convert their operating funds ... to another form of rental assistance,” allowing them to “leverage debt to undertake rehabilitation and needed capital improvements.”

C h a n g e s i n t h e t a x c r e d i t m a r k e t , w h i c h Adam Stein, senior vice president of WinnDevelopment, said occurred the day that President Donald Trump was inaugurated, resulted in the original tax credit syndicator for Prospect Heights, National Equity Fund, being unable to hold their pricing, so the developer solicited new investors. Stein explained that uncertainty and expected changes in corporate tax rates sparked the market change.

“WNC & Associates Inc. has submitted a letter of intent and has agreed to syndicate the LIHTC and federal historic credits at their original pricing provided the transaction closes by March 30, 2017,” the report added.

The board on Thursday also approved a commitment for a $15.45-million mortgage to refinance and rehabilitate the Plaza Village Apartments in Woonsocket, a 229-unit development at 18 Village Road that includes 116 subsidized and 113 market rate apartments. The developer is the Ferland Corp. The complex includes nine three-story apartment buildings on 23 acres, and was originally financed in 1974.

— cdunn@ providencejournal.com

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