The Buzz 3: Redmond on Pause

By on February 8, 2017

Town and county electeds still grappling over funding the Housing Trusts’s affordable rental project.

 

JACKSON HOLE, WY — Progress on the Redmond Street Rentals is stalled again after a series of contentious discussions Monday. During a joint Information meeting, town and county electeds voted to send the project proposal for a 28-unit rental development back to the drawing board. Councilors came to the same decision at a town council meeting immediately afterwards.

The most controversial piece of the proposal was the existence and scope of a guarantor’s agreement that spelled out equity and responsibility for each of the contributing entities: town, county and the Jackson Community Housing Trust. Still, even after the language was removed from the proposal Monday, some councilors felt unprepared to move forward.

Mayor Pete Muldoon, Councilman Jim Stanford and County Commissioners Smoky Rhea and Mark Newcomb were definitively ready to approve the proposal that town and county staff drafted with the Housing Trust. Delaying the decision has these electeds and some community members concerned about just how long the valley can afford to wait for a “perfect” project proposal.

The decision Monday came just before a winter storm that forced officials to close Teton Pass Tuesday and Wednesday, disrupting businesses and town and county operations that depend on this area’s commuter workforce; many of these Idaho residents moved across the pass due to the valley’s deepening housing crisis.

Funding clashes

In the works since 2013, the Redmond project has doubled in size since its genesis. Town council members and county commissioners are divided on approving $2.1 million from the town and $1.95 million from the Jackson/Teton County Housing Authority to fund the project. The votes are contingent on one another—without one’s approval, the other is null.

Councilman Don Frank said he is not convinced that the proposal is polished enough. He was most concerned with the guarantor fee, but said overall the proposal felt like a “draft agreement [was] being presented as a final agreement,” he said.

Frank, along with Councilor Hailey Morton Levinson, also worries about spending the entire housing budget on one project.

“I’m all for housing,” Levinson said. “But we’re also guardians of the public dollar and our tax dollars.” Levinson says she wants to ensure that funds are also available for short-term projects that contribute to long-term goals.

The $1.95 million comes from the sale of Cheney Lane in September 2016. Teton County Housing authority bought Cheney Lane in 2007 using Specific Purpose Excise Tax (SPET) funds that were allocated specifically for the creation of affordable housing. The profit from September’s sale must adhere to the SPET fund’s original goal, so the money must be reallocated toward new affordable housing projects. So far, Redmond is the only such project on the table.

Frank was uncomfortable with moving forward without considering other funding options. “Not everyone agrees that this should be funded with every penny the public has and without a recurring revenue source,” he said. “It’s incredibly premature to commit funds before the conversation is concluded.”

However, proponents bemoaned the amount of time it has already taken for the project to get this far. Rhea said she worries that waiting for a perfect proposal could result in total inaction, leaving the town with nothing at all.

The housing crisis, Rhea said, was not just an issue on the last ballot, but has been a concern for at least as long as she has lived in the valley. She moved to town in 1982.

Community member Reynolds Pomeroy echoed Rhea’s concerns during public comment. “Every one of you stated strong support for the housing shortage at one point or another,” he said. “I’d ask that you not sacrifice the good and search for the perfect.”

In an emotional plea, Hole Food Rescue director Ali Dunford shared that her co-director Jeske Grave recently moved to Idaho due to lack of affordable housing. Grave’s move, Dunford said, “extremely affects our organization … the heart of our organization is getting ripped apart because we have nowhere to go.” Grave previously lived in Blair Place Apartments, where residents there faced a 40 percent rent increase last summer. Her apartment was a hub of activity for the organization.

Conflict during the discussion revolved around three policy decisions, the most contentious being the guarantor fee. County commissioners and town councilors agreed almost unanimously to allow the Housing Trust to increase their loan cap from $3.85 million to $4 million, and all but councilor Frank voiced approval for using Housing Trust criteria to vet residential applicants.

The six electeds who did not voice definitive approval for the project, however, said they at least wanted to see more discussion around the guarantor fee.

The project is estimated to cost at least $12 million. The Housing Trust has raised $3 million, and with the $4 million loan, will contribute $7 million to the project. Muldoon explained that since the Housing Trust is technically contributing the most funding, they are the default guarantor, and as such will earn more equity in the project over time. Still, all other contributors would accrue equity once the rental units started to turn a profit.

The concern surrounding the fee was twofold. Frank was opposed to the fee in any iteration. “I’m fearful of setting a precedent of burdening private partnerships with costs that are not completely necessary,” he said.

The other concern was that in the event that the Housing Trust defaulted on their loan and the project effectively failed, the town would have to foot the bill. Should that happen, the town would be the new guarantor and equity shares would shift in their favor.

Muldoon and Anne Cresswell, executive director of the Housing Trust,  both noted that the town has the option to pick up the project if the Housing Trust cannot maintain it, but is under no obligation to do so. The Housing Trust would, ultimately, be responsible for any deficits.

“We’re not legally bound; the Housing Trust is,” Muldoon said. He also observed that the town’s equity share would increase “because the Trust is bringing debt to the deal and taking risk that we do not have.”

Still, Levinson observed that the town would lose their investment if they chose not to cure the project, so even if they were not obligated to save it, they would feel compelled to do so.  

 Lingering opposition

Controversy surrounding the fee was enough that just an hour later, at the 6 p.m. town council meeting, Cresswell announced that the Housing Trust agreed to abolish it. “It is too important to our community to get these affordable units in the ground, and too detrimental to put it on SPET,” Cresswell told PJH.  “It’s not worth it. We’re willing to walk away if it gets the support of the town council.”

Even with the removal of the guarantor fee, council members were not unanimously comfortable with moving forward. Stanford questioned what else needed to happen for the council to come to an agreement. “One of the key sticking points have been resolved,” he said. “And [Anne] laid out compelling elements for housing trust guidelines.”

Stanford said he was ready to approve the project after just 20 minutes of discussion.

Frank, meanwhile, said there are still questions that need answering, the most pressing of which is how the town would replace these funds for future projects.

Since the town’s $2.1 million vote is contingent on the county’s $1.95 million, the town council voted to continue the conversation contemporaneously with the the county.

Cresswell understood their decision in the face of perhaps an overwhelming amount of information. Still, she noted the decision gets more expensive every day. “We cannot keep kicking the can down the road,” she said. “Costs keep going up because of inaction … It’s time to move it forward, otherwise the cost will continue to increase.”

Newcomb offered an economist’s perspective on the price of not going through with this project. The alternative, he said, would be to remove Land Development Regulations and sprawl development. That would lower the cost per unit of new developments. “But the community has not chosen that path,” he said. Later, he reiterated that “communities who are not willing to pay [for housing] end up with dirty air, dirty water, and maybe no housing.”  

 

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