By Tim Cox
The current owner of the former Mersman Furniture Co. and the financier of the proposed redevelopment of the industrial complex into single-family homes and apartments answered a barrage of questions from Celina City Council members Monday.
It remains unclear, though, whether council members will give the project their final blessing. Two council members are against the proposal and some others have expressed concerns about the project.
A final vote is expected at the March 13 council meeting. In a non-binding vote on second reading of the resolutions, council voted 5-2 to support the project, with council members Angie King and Ed Jeffries casting the dissenting votes.
Council members posed numerous questions to Brickyard Investments Ltd. President Randy Bruns (owner of Rockford Construction), Brickyard employee Jerry Butler of Mendon and Doug Klingensmith of Ohio Capital Corporation for Housing (OCCH).
OCCH and Buckeye Community Hope Foundation are partnering on the project, and Brickyard would build the new homes and apartments. The group is applying for tax credits from the Ohio Housing Finance Agency to help support the project. Council members wanted to know if the proposed development is government subsidized housing. Klingensmith said it is not because rents are determined based on the median income for the county, not the income of the tenant. The federal tax credits are sold through OCCH to create equity in the project, he said.
City officials also wanted to know if the project would lead to more federal housing vouchers in the area. Klingensmith said voucher holders are allowed to live anywhere but said no new government-paid housing vouchers would be created. There are only 16 such voucher holders in the entire county, he said.
The 28 single-family homes are targeted for people with low- to moderate-income who might not otherwise be able to achieve home ownership, Klingensmith said. The 28 apartments are intended for senior citizens.
The houses would be rented for 15 years. After that time, tenants would have the option of buying the home, with the price based on remaining debt on the project and how long the tenant lived there. Some council members questioned whether the rent-to-own deal would pay off for residents.
"I think it's exploiting the poor," King said, noting tenants would pay $300,000 or more for the homes.
"I don't see it as the tremendous opportunity some see it as," council President Bill Sell said.
City officials and project investors also disagree over the demand for new housing. King privately polled area landlords and apartment complex managers and found scores of vacancies.
Klingensmith countered by noting Celina's 11 government subsidized or tax credit supported apartment developments have a current occupancy rate of 97.4 percent. No new apartments have been built since 1999 and only 74 units have been built since 1990, he said.
"It's going to lease up. It's going to be full," Klingensmith said. "They will rent quickly, generally as fast as we can rent them."
The current proposal does not call for any investment of city money, but the project needs city support to qualify for the tax credits. Bruns also said the city could be asked for assistance in the future.
Demolition of the complex is estimated to cost as much as $1.4 million and another $300,000 for environmental cleanup of the site. If the city can secure a grant to help defray those costs, the project can move forward, Bruns said. If no grant funding can be secured, Brickyard officials might ask the city to tap tax increment finance (TIF) revenue to assist the project.
A TIF is set up at the Mersman site, which diverts property tax revenue from new development into a separate account to fund infrastructure in the same neighborhood.
"The project will not happen without some kind of assistance," Bruns said.
King questioned whether the city should pay for consultant Kent Bryan to compile grant applications on behalf of Brickyard. City officials should be focused on issues such as water and streets, King said.
The tax credits will be awarded in July. The popular program is expected to draw 150 or so applications, Klingensmith said, with only 40 or 50 projects gaining approval.