Mainstrasse Renovation Project Loses Out on Tax Credit - Because of Technicality
This story has been updated.
With National Historic Preservation Month around the corner, a significant historic rehab project in Covington's Mainstrasse Village suffered a setback.
The Kentucky Housing Corporation declined to award low-income housing tax credits this year from its urban rehab pool based on the application not meeting all the necessary requirements, the organization told The River City News. In 2015, RCN reported that the Welcome House and Cincinnati-based Model Group would collaborate to renovate to full historic standards 13 properties in the popular neighborhood. The residential units would be managed by the Welcome House to accommodate low-income families. The effort was planned to take place in two phases, based on tax credit allocations. In 2015, the project received $700,000 in tax credits from KHC.
But this year, the project received none.
"For projects proposing the rehabilitation of existing units, there is an age requirement for the property to be at least 20 years old at the time the application is submitted," said Charla Jackson Peter of KHC in an email to RCN. "Proof of the original placed in service date must be provided. Proof can be evidenced in a letter from the provider of the project-based rental assistance, such as the Department of Housing and Urban Development (HUD).
"In the case of this application, a letter was provided from HUD stating that the project was originally placed in service in August 1996, which is less than 20 years. This meant that the project did not qualify for the Urban Rehab Pool, for which the application was submitted."
Jackson Peter said the project could be resubmitted for 2017 tax credits when the units have reached the appropriate age.
Linda Young, executive director of the Welcome House, said that her organization and the Model Group are evaluating their next steps. "The second round of tax credits was denied because of a technicality but our board of directors and Model Group are in discussion," Young said through a spokesperson. "We'll work on a plan to move forward."
The project has been criticized by some neighbors for what they see as concentrating too much low income housing in Covington's northern neighborhoods, and also for locking in the properties to serve low-income residents for the next 30 years. Young has attempted to counter that criticism through an op-ed and through an interview at The River City News.
An earlier version of this article did not specifically cite the tax credits that were not awarded as "low income housing tax credits", relying instead on the "urban rehab pool" language. The story has been updated for clarity.
-Michael Monks, editor & publisher
Photo: Mainstrasse Village (RCN file)