By Eric Curl
Nov. 10, 2022 – The developer planning to construct an affordable housing development on former city property failed for the second year in a row to obtain state low-income housing tax credits f0r the downtown Savannah project.
Even with the city’s support, Pinyan/Procida Development Group’s application was not among the recently announced recipients of the highly competitive tax credits issued annually by the Georgia Department of Community Affairs.
The credits were being sought to help finance a planned 42-unit affordable apartment complex at 1700 Drayton St., which the city sold to the development group for $750,000 last year. To support the project, the Savannah City Council authorized a $1.26 million loan to the developer in April that was contingent on the tax credits being awarded.
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The failed application was the second attempt to get tax credits for the project following a failed application in 2021.
DCA spokesperson Justin Vining said on Thursday the project did not score highly enough to be awarded the credits. The decision cannot be appealed because the application would not have been funded as submitted, Vining said.
A request for information about the potential impact of the application’s denial has been submitted to the city and developer. This story will be updated if that information is provided.
Heritage Place Apartments
Mercy Housing Southeast had better luck obtaining more than $1 million in tax credits for the renovation of the Heritage Place Apartments in Cuyler Brownville, another city supported project. The national nonprofit’s application was approved with the assistance of the city council, which on May 12 approved a $560,000 loan to Mercy for the project.
The tax credits are typically sold to private investors, earning the developer capital that allows them to keep rents at an affordable level, which the developers pledge to maintain for at least 30 years. In the case of the Heritage Place renovations, the credits are expected to help leverage about $14.4 million in financing and tax credit equity.
The 88 affordable apartments for low-income families are located in two historic buildings, the former Charity Hospital and Florance Street Elementary School, that date back to 1931 and 1929 respectively. The former hospital and school building were rehabilitated as multi-family housing in 2001.
The loan is being drawn from the city’s affordable housing fund and administered by the Community Housing Services Agency, a 33-year-old nonprofit that has been financing similar projects for the city since 2012.
Former fairgrounds property
The city had initially planned to also help a developer obtain the tax credits this year to assist in financing senior housing at the city owned former fairgrounds property at 4801 Meding St. The plan, which included leasing the project site to the Chatham County/City of Savannah Land Bank Authority, was abandoned after the city was informed that the DCA would not accept applications that included an option to lease with a reversionary clause, as the city had proposed. Development costs, estimated at about $16 million, were expected to be largely financed through the sale of the tax credits and private financing. City Manager Jay Melder said he was confident the tax credits would be approved for the project in 2023, in a June memo updating Alderwoman Estella Shabazz on the status of the planned development.
The DCA’s housing tax credit program typically reviews about 180-200 applications a year and approves about 100 to 120 of them, according to a 2020 report.
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