The $15 million proposed South Square project just received a $500,000 show of support from the City of Lancaster. Counting an additional $200,000 in “home improvement” funds, City financing would account for about 5% of the total project cost, economic development director Randy Patterson said at the February 23 city council meeting.
Council members voted unanimously to apply for a $500,000 grant with the state department of community and economic development on behalf of the project. Patterson said that the grant funds would be provided by the City as a loan to the project developer, the nonprofit Housing Development Corporation (HDC).
City resident Sheldon Weaver questioned the cost of the project, noting that a rough breakdown would price the sixty completed apartments at $250,000 a piece.
Mike Carper, president and CEO of the HDC, explained that a number of necessary factors cause the price tag for this type of project to surpass typical renovation and construction costs. According to Carper, the project cost is significantly inflated by the following factors:
- A sophisticated demolition plan to preserve the historic nature of the structures
- Legal expenses associated with the pursuit of special financing for affordable housing
- Setting aside capital reserves and operating reserves to keep the facilities affordable and financially viable
“If I’ve got a nice open green field to build on, I can predict those costs pretty easily,” Carper later told NewsLanc, “But when you’re acquiring historic property and you’re trying to preserve historic facades, that’s costly right away….This is really a community redevelopment project, so it has a cost above and beyond what you will see with other affordable housing projects.”
Carper did not elaborate on exactly how much of the total project cost is dedicated to legal fees and reserve funds, noting that the plans and expenses remain in flux.
Cynthia Fuhrer, who works closely with the South Square project for the HDC, said that she understands why people are initially surprised to hear the figures: “When I started this I was amazed at how much it cost, but its for all those little things—the accounting you have to do, the lawyers we have to have…”
So what happens if the grant is denied by the state? Is this guaranteed financing, or will the city turn around and say “no” if the grant falls through?
Is this another attempt to return the ‘face’ of downtown Lancaster back to the forties and fifties?? How much “behind the scene’ influence is LNP having in this? Is this nothing more than an attempt to improve the ‘marketability’ of the Convention Center / Marriot?? One has to wonder……!!!!