Dean Olsen
The Illinois Times
Families looking for affordable housing will be the beneficiaries after state officials approved low-interest financing for $10 million in renovations at Pine Woods Apartments in Springfield, according to Ward 7 Alderman Joe McMenamin.
“This will be really attractive to folks who have a modest income,” McMenamin said after St. Louis-based Bywater Development Group received Illinois Housing Development Authority approval for the project.
Through IHDA, Bywater will receive $18 million through the sale of federal tax-exempt bonds – a form of lower-than-market-rate borrowing – to be repaid over 19 years, according to president Aaron Burnett.
Another $11 million will be generated for the project through IHDA’s issuance of dollar-for-dollar tax credits to PNC Bank in exchange for an equity stake in the Pine Woods project for 10 years, Burnett said.
In addition to the $10.1 million for renovations, the $29 million raised through IHDA will finance Bywater’s $11 million purchase of the complex from a St. Louis-based investment group known as Springfield Housing Associates. The remaining approximately $8 million will be used for interest, consulting and legal costs, as well as for a reserve to fund future repairs and capital improvements, Burnett said.
Approval from IHDA’s board on Jan. 21 represented Bywater’s third attempt at financing through IHDA since 2013. Burnett and McMenamin said competition for funding through the agency has been fierce for years.
Bywater’s plans call for $10.1 million to be spent for rehab on all 168 units in the 31-year-old complex at 1665 Seven Pines Road on Springfield’s west side. That works out to about $60,000 per unit among the one-, two- and three-bedroom units in the complex’s 14 three-story residential buildings. All units will receive new appliances, flooring, carpeting, countertops and kitchen cabinets, and there will be improvements to the heating and air conditioning systems.
The clubhouse and adjacent swimming pool also will be upgraded, Burnett said, who noted that the complex had been deteriorating and getting close to the end of its useful life.
The work will begin in about 45 days and go on for 14 months, Burnett said, with vacant units renovated first. Tenants will be moved into the rehabbed units, then their units will be rehabbed in turn, as part of a rolling schedule over the next year.
Monthly rents for the rehabbed units will be slightly higher than the current units but still an average of 20%-25% lower than market rates, Burnett said. In addition, the installation of new windows and other energy-efficiency measures are expected to save tenants money on their electric heating and cooling bills.
After renovations are complete, a one-bedroom unit will rent for $615 per month. A two-bedroom unit will rent for $730 per month, and a three-bedroom unit will be $835 per month.
People moving into the new units will have to qualify as moderate-income renters with a maximum annual household income of $35,940 for one person, $41,040 for two people, $46,200 for three people, $51,300 for four people and $55,440 for five people.
The original complex was built for moderate-income tenants. Because current tenants qualified for their apartments just once based on their income at the time of move-in under the previous owners, some may not qualify to live in Pine Woods going forward, Burnett said.
If any tenants have to leave, Pine Woods will offer them financial assistance in moving, he said.
Many Pine Woods tenants are looking forward to the improvements, Burnett said, adding that the property management company at the site, Sugar Creek Realty, will not change.
He said Bywater – which has developed moderately priced rental housing in Illinois, Missouri, Kentucky and South Carolina – is grateful for the support of local elected officials and organizations that wrote letters of support for the project.
Those writing letters to IHDA included McMenamin, Mayor Jim Langfelder, the Springfield Sangamon Growth Alliance and the Greater Springfield Chamber of Commerce.
McMenamin said areas along Seven Pines Road, which include the Orchard Park and Westbrook complexes, make up the largest cluster of apartments in Springfield.
The city has financed improvements in sidewalks and streets in the area over the past decade, McMenamin said.
“It’s really important to keep that whole area viable and strong,” he said.
Joe McMenamin for Ward 7 