Proponents of a $14.8 million plan to revitalize housing on Lancaster city's South Queen Street are lining up support and preparing for a major hurdle.
In recent days, Housing Development Corp. representatives have secured financial commitments and governmental approvals for their project to renovate existing buildings and construct new apartments.
They plan to submit an application Friday to the Pennsylvania Housing Finance Agency. The nonprofit housing developer and manager is seeking $11.7 million in federal tax credits administered by the state for South Square.
South Square plans call for extensive renovation of 10 buildings on the west side of the 100 block of South Queen Street, including demolition of additions built onto the rear of the buildings. New five-story additions would then be added to the buildings.
When completed, South Square would have 62 spacious one-, two- and three-bedroom apartments in 70,000 square feet of space. They would replace 64 units occupying 30,000 square feet of space, architect Wendy Tippetts said.
"It's so much better than what's there now," Tippetts said of the existing units, many of which are single-room apartments that were rented by the week.
Tippetts on Monday appeared before the city's zoning hearing board seeking approval to have some of the proposed units be smaller than the square footage required by the city zoning ordinance. She argued that the ordinance is more stringent than the state application requirements.
The three-member zoning hearing board granted unanimous approval.
Tonight, project representatives will come before Lancaster City Council, which will consider an application for $500,000 for a Housing Redevelopment Assistance grant for the South Square.
The funding is through the state Department of Community and Economic Development, but the city must apply for the money on behalf of the project, HDC spokesman Ed Kaminski said.
The grant funds are one of eight sources that project planners hope to tap for the remaining $3.1 million that would be needed for the project if the tax credits come through.
Also important with the council vote is a show of support for the project from city officials. That should help the PHFA application, Kaminski said.
Shows of support — and important funding — also have been made recently by the PNC and Wachovia Wells Fargo foundations, each of which donated $15,000, and the High Foundation, which gave $39,500, he said.
Also important is the commitment of four local banks to purchase the tax credits if they are approved. Kaminski said the banks, two of which have headquarters in Lancaster, agreed to buy the credit for 80 cents for every $1 in credits.
Typically, such transactions are for 70 cents to 72 cents for every dollar in tax credits, Kaminski said.
The sale of those credits — if approved — would supply $11.7 million for the project, he said.
HDC will be competing for the tax credits with other projects from around the state. It will likely be July before state officials announce which projects will receive credits.
If approved, construction work could begin this fall, and the new units could be completed in late 2011.