Cedar Rapids council picks HACAP to own, operate The Heights

The Hawkeye Area Community Action Program (HACAP) will own and operate The Heights affordable housing complex in southeast Cedar Rapids after a city-led remodeling project is complete. At its regular meeting Tuesday, the council selected HACAP’s proposal for The Heights from among four applicants, including HACAP, the Affordable Housing Network (ANHI), the Area Substance Abuse Council (ASAC) and Genwealth Holdings of North Liberty. The proposals were then reviewed by a committee composed of a financial lender, a local property manager experienced in affordable housing, a code enforcement officer, and grant compliance specialists. Criteria used to evaluate the proposals included owner capacity and project feasibility, a management and maintenance plan, community benefit, service to a higher-need population and plans for tenant amenities. According to council documents, HACAP’s proposal “received the highest score overall, has extensive experience with funding sources and with the populations as required by these grants. Their pro forma also showed significant costs allocated to replacement reserves, maintenance and staffing costs, including the ability to provide wrap-around services to tenants.” At Tuesday’s meeting, housing services manager Sara Buck said that the local lender on the committee said “this was really the only pro forma that really was 100% realistic in looking at reserves and maintenance costs … their proforma did show significant costs allocated to the replacement reserves, maintenance and staffing costs for that long-term compliance … we are wanting to make sure that with this longer affordability period, it's still in good condition and checking all those boxes.” "They (HACAP) also proposed a lower rent amount for households earning under 30% of the Area Median Income and included two letters of support with their proposal," she added via email. "We received very competitive proposals overall, from entities that we currently work with on affordable housing projects, but HACAP’s proposal came out on top." In response to a question from council member Ann Poe, Ms. Buck also noted that HACAP will have a staff member onsite at The Heights, at 1500 Second Ave. SE, for at least 30 hours a week. Council member Dale Todd said The Heights project represents a new era for the city’s Wellington Heights and Mound View neighborhoods. “We're looking at this being a component of the revitalization of that block, that core part of the neighborhood,” Mr. Todd said. “This is the first step in helping to stabilize what was a really blighted building that probably came very close to the wrecking ball. We were able to save it, and I hope it will be the start of some other things in the area.” The city will now negotiate a formal development agreement with HACAP, outlining compliance with state and federal grant requirements for the property and stipulating donation of the property for $1, with a property lien contingent on maintaining a 15-year affordability period for the property. "While the property will be transferred for essentially a dollar, the lien ensures compliance with the code and the affordability of the units," Ms. Buck said via email. "This process is backward to what we would normally do, which is award a nonprofit a grant and they would acquire and remodel the property, then rent the property affordably. The city took this project on due to the size and complexity of the project, as well as from a capacity standpoint. Most of these grants were allocated during the pandemic and after the derecho, when our nonprofits were still inundated in disaster response. We knew that these funds were 'once in a lifetime' funds and we needed to take this opportunity to create more affordable housing in our community." Under the development agreement, ownership of The Heights will be transferred from the city to HACAP once construction is complete, with an expected date of March 2024. The city purchased the vacant, blighted former Colonial Center building, now known as The Heights, in December 2021, and has been at the forefront of a $6.9 million project to rehabilitate the building into 25 affordable housing units – 22 one-bedroom units and three two-bedroom units. Six of the units are also fully ADA compliant, and all are ADA convertible. The renovation project, boosted by four federal grants, will incorporate several amenities, including office spaces, a computer lab, a meeting room, on-site laundry tenant storage, and a gas-powered backup generator. Under stipulations of the federal grants, units in The Heights will be available to residents with incomes up to 80% of the federal poverty line.