SEATTLE—April 11, 2007—Seattle Housing Authority and Dearborn Street Developers LLC today announced plans to build 200 affordable apartments at Dearborn Street, a mixed-use urban infill project on the Goodwill site at the edge of downtown.
Dearborn Street is a pedestrian-friendly project that will include a much-needed new and expanded home for Goodwill, a diverse mix of retail stores, open space and a range of housing. The project will feature a total of up to 550 housing units sitting atop the retail space.
Seattle Housing already has secured $20 million in federal New Markets Tax Credits, which it will make available to the partnership in order to provide subsidy for small businesses in the new center. The program will provide a combination of equity and conventional debt for the project. In addition, SHA has applied for an additional $20 million in New Markets Tax Credits for the development.
New Markets Tax Credits are a program of the U.S. Department of the Treasury. They are designed to spur commercial development in under-served areas and promote access to growth in urban and rural communities. This is the first time that SHA has used New Market Tax Credits and at $40 million, it would be one of the largest uses of New Markets Tax Credits in Washington state.
Dearborn Street Developers LLC and Seattle Housing are also partnering to build 200 affordable apartments. Of these homes, up to 100 apartments will be affordable to low-income seniors with incomes less than 50 percent of the Area Median Income ($27,250 for a single-person household), with the goal of serving mostly extremely low-income seniors with incomes less than 30 percent of the Area Median Income ($16,350 for a single-person household). The other 100 affordable apartments would be designed as workforce housing to serve people making less than median income ($54,500 for a one-person household).
“We all know that affordable housing is becoming more difficult to build due to rising land and construction costs,” said Tom Tierney, SHA executive director. “Public-private partnerships, such as the Dearborn Street project, enable SHA to increase the stock of affordable housing that our city so desperately needs.
“In addition, this project is centrally located near transit and job centers, such as the International District and downtown Seattle. Our partnership with Dearborn Street allows us to create more housing and increases the overall public benefit of the project.”
SHA and Dearborn Street Developers have been in discussion over several months to explore ways of working together to enhance the project. The tax credits will make commercial investments in the project more attractive by lowering the threshold for investment by small- to medium-sized retail businesses. Under this program, Dearborn Street will provide up to $1 million in direct rent subsidies to small business operators over 10 years. This will keep commercial rents lower and make it possible for diverse and local small businesses to participate.
With subsidy for the commercial development, the Dearborn Street partnership is able to support additional affordable housing. The partnership will turn to the Housing Authority to build and operate the housing.
“This New Markets program directly supports the small local retailers and indirectly supports the affordable housing component by helping defray the costs of a complicated mixed-use project. We were challenged to provide a new home for Goodwill, to include local merchants, and to commit to affordable housing. This program fulfills all three goals,” said Darrell Vange, development manager for Dearborn Street Developers.