Clarification on $1 million HUD grant


Editor’s Note: Home in Henderson offered Downtown Development Director Phil LaKernick the opportunity to clarify the ins and outs of the $1 million grant the City received from HUD for the renovation of downtown apartments. Here is what he sent us in his own words:

1. $1,000,000 grant to the City of Henderson for renovating 8 Downtown 2nd & 3rd floor spaces above storefronts, while preserving the Historic values of these buildings.

2. $800,000 + match by the seven (7) property owners. This will be their own finances or bank loans.

3. Historic preservation Tax Credits will be applied for and used by the owners.

4. Establishment of 33 low income (6 units) 27 moderate income apartments. There will be 11 one bedroom and 22, 2 bedroom apartments.

5. Rental costs will be approximately $450 to $700 per month. Depending on size and # of bedrooms.

6. This will NOT be Section 8 housing and NO Section 8 funds are being requested or offered.

7. There is an 80% of median household income rule applied to low to moderate income; the approved amount is $42,484 X 80%= $33,987.20 and a 50% rule for low income; $42,484 X 50%= $21,242.

8. Newly hired teachers, nurses, technicians, journalists and other new and or young families are the target population. There is adequate Section 8 housing and elderly housing in and around Downtown, we do not need for this type housing at present.

9. The renters of these apartments can not contribute over 30% of their adjusted gross income for rent.

10. The City of Henderson is the recipient of all grant funds.

11. These Main Street units can not be public housing.

12. The original rental is limited to the 80% rule; all units can become market rate after the initial resident moves out.

13. The Main Street project must:

a. Have as its purpose the revitalization &/or redevelopment of an historic area;

b. Involves investment or participation, by the community government and private entities in the community;

c. Involves the development of affordable housing that is located in the historic area that is the subject of the project.

d. Complies with the National Historic Preservation Act, Section 106 to preserve significant historic or traditional architecture and design features in the structures involved in the project.

e. The sites of this project must be approved by the State Housing Preservation Officer.

f. HUD’s Environmental Review must be completed prior to beginning any construction

14. Grant funds must not be expended on:

a. Public housing activities;

i. Replacement or demolition of public housing units;

ii. Section 8 housing;

iii. For displaced public housing residents;

iv. Administrative costs of the Grantee;

v. Legal Fees

vi. Transitional Security activities

vii. There are limits for Total Development Costs

viii. There are Safe Harbor limits on overhead and owner profits

ix. The City applying can not have more than 100 public housing units

x. The City can not be over 50,000 population.

The grant information is 173 pages long. The above is a snapshot of these rules and regulations. This project will hopefully jump start a new Revitalization of our Downtown Historic Area. By products of this project are:

i. Reduced crime rate in the Downtown area.

ii. Stimulate other Downtown property owners to renovate 2nd and 3rd floor areas for residential living.

iii. Bring new businesses to Downtown.

iv. Increase property values in Downtown

v. Make Downtown a place to be and use.

vi. Help in securing a stop on the new high speed rail and the building of a new station in Downtown

Hopefully this will quell the misinformation that has surfaced on HIH. Thank you again for the opportunity to respond.

Philip Lakernick
HVDDC Executive Director and Main Street Manager