The first phase of the project, 39 public housing apartments and 14 market-rate rental units, will be finished by December 2003.
By HAROLD GWIN
VINDICATOR SHARON BUREAU
SHARON, Pa. -- The rebuilding of the Steel City Terrace apartment complex on Spearman Avenue in Farrell will move into full swing late next week.
The Mercer County Housing Authority, which owns the complex, authorized the signing of development agreements, mortgages and other documents for the project Thursday.
L. DeWitt Boosel, executive director, will sign those papers Wednesday in Pittsburgh.
The authority has formed a partnership with Falbo-Penrose of Pittsburgh to do the work. Falbo-Penrose will be the developer and will manage the new units under a 50-year lease.
Cost of project
The entire project will take several years and will be done in phases with a total cost estimate of $30 million.
Boosel said Thursday's approval by the authority board clears the way for the first phase of the replacement of the 100-unit, barracks-style apartment complex.
It will eventually be replaced over a wider project area by a total of 145 units, 74 of them public housing, 45 of them market-rate rental apartments, and 26 home-ownership houses, which will be sold.
The first phase, with a price tag of about $8.7 million, involves demolition of some of the old buildings and the construction of 39 new rental units and 14 market-rate rental units, Boosel said.
The plan is to have them finished by December 2003, he said.
The authority has secured a $9 million grant from the federal department of Housing & amp; Urban Development through the federal HOPE VI development program, and $2.3 million of that is earmarked for the first phase work, Boosel said.
That money, along with $1.6 million from the authority's financial reserves, will be loaned to Falbo-Penrose to help finance the project. The developer will eventually repay those loans, and the money can then be used for other projects, Boosel said.
Another $4.6 million will be borrowed from National City Bank to complete the first phase financing, he said.
Once the units are built and ready for occupancy, the developer will pay off that loan by selling the $4.8 million worth of state low-income tax credits awarded to the project to National City Community Development Corp., an arm of National City Bank, which will use them as a tax write-off.
Applied for tax credits
Falbo-Penrose has applied for another $1.9 million worth of tax credits on the project and, if the Pennsylvania Housing Finance Agency approves the request, the authority's financial participation in the first phase of the development will be cut by that same amount, Boosel said.
HUD has been providing the authority with an operational subsidy of $233 per apartment each month for Steel City. Boosel said $196 of that amount will now go to Falbo-Penrose, which will manage the units.
Because the authority has the ultimate responsibility for the units and the property, the authority will keep $37 per apartment per month to offset its own monitoring costs, he said.