December 7th 2024.
Peter Culshaw has taken a major step towards his goal of transforming old office spaces into functional and modern bedrooms. As a developer and executive at Shea Properties, he has successfully secured over $4 million in federal and state tax credits that will allow him to finance the conversion of an office building at 4340 S. Monaco St. near the Denver Tech Center into residential units.
Culshaw is excited about this project as there is a high demand for affordable housing in the immediate area and all the existing options are fully occupied. This project is one of only ten income-restricted housing developments in the state that were awarded tax credits by the Colorado Housing and Finance Authority last month. Culshaw believes that the project stood out due to its unique nature as a conversion.
He explains that the selection process for these tax credits is very thorough and considers various criteria. In order to increase their chances of being chosen, Culshaw and his team made sure to meet as many of these criteria as possible. Now that they have secured the tax credits, Culshaw hopes to close the purchase of the property by March and begin the redevelopment process as soon as they receive a building permit next month. It is estimated that the entire project will take about a year to complete.
The four-story office building will be completely renovated and transformed into 143 income-restricted apartments. The units will range from studios to four-bedroom apartments and will cater to individuals and families making between 30 and 70 percent of the area median income. This project is set to become the first office-to-residential conversion to begin in the Denver area since the start of the pandemic.
Out of the 32 applications received by CHFA, only 10 projects were chosen to receive the tax credits, totaling 1,169 units. Each of the selected developments will receive a 4 percent federal tax credit as well as additional state tax credits. These tax credits are then sold to investors, allowing developers like Culshaw to raise equity for their projects. This equity helps reduce the need for other sources of funding and makes it financially feasible to offer affordable rental rates.
Apart from Culshaw's project, here is a breakdown of the other developments that were awarded tax credits:
1. Compass Pointe, Pueblo
Located at the southwest corner of Oakshire Lane and Beaumont Street, this development will have 192 units with a mix of income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a 9 percent credit of $3.62 million and a state credit of $1.8 million.
2. Creekside Flats, Denver
This project by Archway Investment Corporation will have 150 units with income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a 4 percent credit of $2.99 million and a state credit of $1.8 million.
3. Glenwood Gardens, Glenwood Springs
Cohen-Esrey Development Group's project will have 80 units with income restrictions ranging from 20 to 80 percent of the area median income. It was awarded a 4 percent credit of $2.13 million and a state credit of $1.8 million.
4. Grove in Bloom, Fort Collins
Pedcor Investments, LLC's project will have 264 units with income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a federal 4 percent credit of $4.73 million and a state credit of $1.7 million. The Health District of Northern Larimer County will also provide free health screenings and primary care services to residents living in the 30 percent AMI units.
5. Jet Wing Flats, Colorado Springs
Developed by Commonwealth Development Corporation and Solid Rock Community Development Corporation, this project will have 68 units with income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a 4 percent credit of $1.36 million and a state credit of $1.8 million.
6. Maiker Uplands, Westminster
Maiker Housing Partners' project will have 70 units with income restrictions ranging from 30 to 70 percent of the area median income. It was awarded a 4 percent credit of $1.65 million and a state credit of $1.79 million. Maiker and North Metro Services will also provide services to neurodiverse residents.
7. Stables, Aurora
Grovewood Community Development, Inc.'s project will have 85 units with income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a 4 percent credit of $2.04 million and a state credit of $1.8 million.
8. Summit at Granby Apartments, Granby
This project by Summit Housing Group, Inc. will have 67 units with income restrictions ranging from 30 to 80 percent of the area median income. It was awarded a 4 percent credit of $1.51 million and a state credit of $764,007. This will be the first income-restricted tax credit development in Granby.
9. Tiara Apartments, Aurora
Developed by KCG Development, LLC, this project will have 50 units with income restrictions ranging from 30 to 60 percent of the area median income. It was awarded a 4 percent credit of $877,787 and a state credit of $1.33 million. The redevelopment of this building will preserve existing affordable housing for seniors aged 62 and older.
With the help of these tax credits, these developments will be able to provide much-needed affordable housing options for individuals and families in Colorado. To stay updated on the latest real estate and business news, sign up for our weekly newsletter, On the Block.
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