Sholom Home Owners Don't Get City Bonds
Wednesday, February 01, 2017 1:35 PM
Architect Ken Piper explains floor plans for the proposed Como Park Senior Living facility.
The city's Housing and Redevelopment Authority has informed the owners of the former Sholom Home property that they will not get $18 million in tax-exempt bonds that they were seeking to convert the abandoned nursing home on Midway Parkway into an assisted living facility for 168 residents.
Carlson CRE, the developers of the former Sholom Home property, was seeking the tax-exempt bonds to provide about half the funding necessary to convert the abandoned nursing home into a facility tentatively named Como Park Senior Living. The property has been vacant since 2009.
David Grzan, president and CEO of the Carlson CRE Group, said in an email to District 10: "We will continue to move forward and hope that this material setback does not render itself fatal to the project."
The District 10 Como Community Council board voted Feb. 21 to support the request. However, HRA received more requests for bonds than it is legally allowed to issue; the Como Park project lost out in the HRA's competitive evaluation process.
The developers told District 10 they intend to gut the four buildings at 1554 Midway Parkway. The nursing home, which could house more than 360 residents, instead would be converted into 143 one-bedroom assisted-living suites, and 25 studio units for memory care. They also plan noticeable exterior upgrades, especially to the original 1929 building. “We’re trying to bring back some of the character of the building,” said Ken Piper, of Tanek Architects.
The site would retain 57 parking spots, which developers say meets city code requirements.
Mix of market-rate and affordable units
Stephanie Hawkinson, of the Landon Group, said that of the 168 total units, 45 would be market-rate apartments renting for about $2,700 a month. The remaining units would qualify as affordable housing for seniors, she said, with subsidized rents ranging from $751-$891 a month. Under terms of the tax-exempt bonds, the rents must qualify as “affordable” for 30 years, she said.
Dave Carr, of Graham Construction, said that if the bonds were approved, construction could have begun this May and the first residents could have moved in fall 2018. Asbestos remediation actually started in March.
City has more requests than money
The tax-exempt feature of the city bonds is desirable, Hawkinson said, because it makes the project more attractive to other investors. However, the city must work within state-imposed caps of how much tax-exempt bonding it can issue, and requests to the city exceeded the legal cap, Hawkinson said. That means Como Park’s request was competing with other projects.
Before the city issued its decision, she said not receiving the bonds likely could cost the project $5 million short and delay renovation at least 12-18 months.
Under the terms of revenue conduit bonds, Saint Paul is not on the hook for any money because revenue from the project pays off the bonds, said Jenny Wolfe, director of housing for the city’s Department of Planning and Economic Development.