Huntingburg commits $350,000 to hospital housing development

Huntingburg – The Huntingburg Council committed $300,000 in additional economic incentives to developer Miller-Valentine Group’s proposed senior living project in the empty St. Joseph Hospital building.

Pete Schwiegeraht, a developer with Cincinnati-based Miller-Valentine Group, presented the Huntingburg Council with an overview of the group’s plan for about 30,000 square feet of the building.

The purchase is dependent upon the group receiving rental housing tax credits through the Indiana Housing and Community Development Authority. These tax credits will act as the primary funding source for the project.

Competition for those tax credits is fierce according to Schwiegeraht. “I would say we have a 75 to 85 percent chance to be approved,” he told the council Thursday night.

The approval is based on several scoring factors like whether the development is in an area designated for revitalization, is there a need for senior housing, has another development utilized the tax credits — Huntingburg hasn’t — , and is the project a combination of new construction and adaptive reuse of an old building.

According to Schwiegeraht, the site meets these criteria but in addition to this, the score is largely factored on commitments from the city. To earn those points, the council gave Mayor Denny Spinner authorization to sign a letter of intent to provide $300,000 in economic incentives for the project as well as earmarking $50,000 towards exterior improvements.

The economic incentives are based on Miller-Valentine moving forward with the project. According to Mayor Spinner, the city hasn’t decided where those funds will come from but the $300,000 could be funded through the creation of a Tax Incremental Financing District or through the city’s Tax Abatement program.

The city has already set aside $50,000 for future development of the site. The additional $50,000 will come from funds that were dedicated towards the development of the hospital when the St. Joseph, LLC purchased it from St. Joseph Hospital. That money has been earmarked as an economic incentive for the area since then, but as nothing has happened with the beleaguered building, the money has remained unspent.

Schwiegeraht also provided the council with several architectural plans for the renovation and addition to the north side of the building. The plan includes creating a condominium association for individuals who are 55 and older.

Schwiegeraht stated the company will invest about $9 million to acquire, renovate and add to the northwest wing of the building to create approximately 50 condos. The senior independent living apartments will be one- to two-bedroom units ranging from 675 to 875 square feet with full amenities.

Those amenities in the development include a onsite theater, fitness center, business center, and banquet facility.

To qualify for the housing tax credits, the units must be affordable for individuals whose income is 60 percent of the median income for the area. Schwiegeraht stated the rental prices could vary because of that requirement. “On the high end, but this can vary because of the restrictions, this will be right around $600 to $625 and could go as low as $575,” he said. “And there will be tiers lower than that adjusted for your income level.”

Miller-Valentine will apply for the tax credits by November 1 and will know if they received approval for the tax credits by late February or early March of 2014. Construction would then begin fall of 2014 with completion by fall of 2015.

The project will cost between $9 to $10 million and will be open for local bidding.

The $50,000 committed by the city will be used to improve offsite features of the area such as sidewalks and walking paths connecting to the Huntingburg Event Center or local restaurants. The $300,000 is committed to the project construction and improvements.

The letter of intent specifies the economic incentives are dependent upon Miller-Valentine receiving the tax credits and completing the purchase. According to Mayor Spinner, if they complete those prerequisites then the city will formulate a plan to create those economic incentives through the use of various programs such as TIF or the tax abatement.

According to Schwiegeraht, the condo development could bring about $50,000 a year in additional tax revenue for the city not to mention the goal of further development in the area Miller-Valentine’s project could spearhead.

Councilman Steve McPherron questioned the likelihood of the project being approved for the tax credits. “We feel confident we will have a very competitive application. Last year [2014], 14 of 70 applications were approved, but Miller-Valentine has submitted nine applications in the past four years and seven have been funded,” Schwiegeraht said.

Miller-Valentine is an award winning 50-year-old company that manages over 16.5 million square feet throughout the Midwest region.