February 22Nd, 2021 Mayor Brandon Whipple and Members of City Council City of Wichita, City Hall 455 N
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February 22nd, 2021 Mayor Brandon Whipple and Members of City Council City of Wichita, City Hall 455 N. Main St Wichita, KS 67202 RE: Proposed City of Wichita, Kansas Tax Exempt Industrial Revenue Bonds Issuance Steele Greenway LLC is a newly established entity created for the purpose of purchasing, renovating and operating the apartment complex known as Greenway Park. The apartment complex is located at, 404 W. Pawnee Street, Wichita, KS 67213. The 3-story, mid-rise apartment building is situated on 3.3 acres of land and contains 91 one-bedroom units reserved for very low income elderly and disabled residents. The property is 100% covered by a Project Based Section 8 Housing Assistance Payment (HAP) Contract which subsidizes the resident-paid portion of the rents due each month. The property is currently well occupied with a strong waiting list. Built in 1979, the property has not received substantial repairs since being originally constructed and is in significant need of both interior and exterior renovation. Steele Greenway LLC plans to significantly renovate the complex following the purchase resulting in substantial interior, exterior and unit repairs. Additionally, as part of the purchase the HAP contract will be extended for a period of 20 years from the closing date preserving this important affordable housing resource for the community. Following the acquisition, Greenway Park will be managed by Monroe Group Ltd., the sister company to Steele Properties which is the parent entity of Steele Greenway LLC. At this time, we are requesting your support for the issuance of $10,000,000 City of Wichita, tax exempt industrial revenue bonds to help fund the planned renovations for this project. We would greatly appreciate any support the City can offer for the substantial improvement of this property and the surrounding community through the City’s participation of an industrial revenue bond issuance and a corresponding sales tax exemption effective during the renovation of the property. The planned renovations will result in over $4,400,000 dollars of hard cost improvements to the property and any savings that can be achieved through a sales tax exemption will help to maximize our investment into the community. We look forward to working with you on this project and preserving Greenway Park as an important resource of affordable housing within the City for years to come. Thank you, Justin Unger Development Manager Steele Shadway LLC 6875 E. Evans Ave. Denver, CO 80224 Office: 303-226-9137 Cell: 303-947-6416 February 22nd, 2021 Mayor Brandon Whipple and Members of City Council City of Wichita, City Hall 455 N. Main St Wichita, KS 67202 RE: Proposed $10,000,000, City of Wichita Kansas Tax Exempt Industrial Revenue Bonds The Honorable Mayor Whipple and City Council members: This letter is to request approval by the governing body of the City of Wichita, Kansas for a Letter of Intent to issue its tax exempt industrial revenue bonds in an amount not to exceed $10,00,000. The proceeds of the bonds will be used to finance the purchase and renovation of Greenway Park. Renovations will be made to the existing community room and leasing office, as well as the common area hallways, individual units and building & site exterior. The site address is attached here as Exhibit A. Steele Greenway LLC is in the process of applying for 4% low income housing tax credits with the Kansas Housing Resource Corporation (KHRC). Following the purchase, the property will be leased and operated by Steele Greenway LLC. 1. Names and Addresses of Proposed Owner Owner: Steele Greenway LLC 6875 E. Evans Ave. Denver, CO 80224 Telephone: 303-322-8888 2. Names and Addresses of Principal Owner, Guarantor and Property Manager Managing Member: Steele Properties Holdings IV LLC 6875 E. Evans Ave. Denver, CO 80224 Telephone: 303-322-8888 Guarantor: Steele Properties LLC 6875 E. Evans Ave. Denver, CO 80224 Telephone: 303-322-8888 Management Company: Monroe Group Ltd. 6875 E. Evans Ave. Denver, CO 80224 Telephone: 303-322-8888 3. Specific Location of the Project 4. General Description of the Project 5. General Description of the Proposed Project Improvements 6. Projected Benefits to the City of Wichita HISTORY Greenway Park is located at the corner of W. Pawnee Street and S. Waco Ave. in the South Central neighborhood which is on the south side of Wichita. The three story mid-rise tower was built in 1979 to house elderly and disabled residents in the Wichita area. Since its original construction, the apartment complex has received limited repairs and as such its systems, fixtures and appliances are in need of replacement. The mid-rise tower requires both systematic and cosmetic upgrades in order to remain a viable source of affordable housing for low-income seniors in the Wichita area. Our company recently negotiated and executed a purchase contract to acquire the property with the closing expected to take place in June of 2021. We are currently in the process of collecting due diligence, finalizing our renovation plans and selecting financing partners to provide the debt and equity financing to help fund the acquisition and planned renovations. RENOVATION PLAN The renovations will involve very limited changes to the existing floor plans as the property is already well occupied by low income senior and disabled residents. In order to comply with federal accessibility requirements, we will convert five (5) units to ADA units which will involve the reworking of the kitchens and bathrooms to be fully accessible by a person in a wheelchair. The renovations will involve significant upgrades to the existing systems in the buildings as well as the individual units themselves along with the corridors and the leasing office and existing community room. We have the funds in place and, with the help from the City of Wichita as well as Section 42 Tax Credits, plan to invest approximately $4,400,000 (around $48,000 per unit) to completely renovate the interior and exterior of the tower. These upgrades will include: *New entry door hardware *Complete roof replacement with 25-year warranty *All new bathroom accessories & cabinets *New hardwired smoke/Co2 detectors *New common area lighting, emergency exit lights, stairwell lights, can lighting & unit lighting, exterior site lighting & new switches/receptacles (all LED) *New building & unit signage *New kitchen and lavatory faucets *New shower valves and trim, shower heads *New low flow toilets *New kitchen cabinets and countertops in all units *Replaced flooring in kitchens, bathrooms and entry ways of all units with new LVT flooring *New refrigerators and ranges in all units *Painting in ADA units, managers office and community kitchen *New community kitchen and countertops in community kitchen *Full exterior siding replacement with installation of insulated backing *Full painting of new building exterior siding *Re-grading of landscaped areas around building *Asphalt parking lot repairs *Concrete sidewalk repairs *ADA parking conversions *Accessible path development to parking lot, front door entry, leasing office and community room *Seed and straw site disturbed areas of yard *Removal of abandoned well on site currently Once completed these renovations will bring the apartment complex up to modern standards and greatly improve the living conditions of the existing residents who call Greenway Park home. The resident-paid portion of the rent will not change as a result of purchase or renovations. Additionally, Monroe Group will provide superior, hands-on management for the residents to help ensure they enjoy a safe and quality community for years to come. BENEFITS TO THE CITY AND THE COMMUNITY *Preservation of Low Income Housing – As of the closing date, the existing HAP contract will be extended for a period of 20 years preserving Greenway Park as a low income housing complex for elderly residents in Wichita for the foreseeable future. *Image – The exterior of Greenway Park needs repair and cosmetic upgrades. In addition to significant concrete repairs to the exterior of the building, the entire building will be repainted during the renovations. The fresh paint will revitalize the tower and greatly increase the street appeal of the building and surrounding neighborhood. *Revitalization of South Central neighborhood – By investing millions of dollars in the property we hope to spur further investment in the surrounding South Central neighborhood. The aesthetic upgrades to the property, which represents a large portion of the housing in the surrounding neighborhood, will help revitalize the community and potentially drive additional growth and investment into the neighborhood and City of Wichita as a whole. *Investing in the City and Local Economy – The multimillion dollar renovation will result in significant funds being invested into a core area of Wichita. The general contractor will purchase certain materials for the renovation locally thereby driving investment into the local economy. *Employment – The property will maintain two permanent employees for regular operations as it is currently staffed. During renovations, an additional 20-25 jobs will be provided to local sub-contractors or service technicians as the improvements are completed. In addition, local vendors will receive permanent income from ongoing services performed onsite preserving economic benefits for the surrounding community for many years to come. *Future Preservation Opportunities – The parent company of Steele Greenway LLC, Steele Properties LLC, is interested in expanding its presence is Wichita by looking at future opportunities to preserve the existing Section 8 Housing supply within the City. Greenway Park will mark Steele’s third renovation undertaking in the City, following its recently completed renovation of Shadyway Plaza Tower and more recently the ongoing renovation of Somerset Plaza Tower. There are numerous other existing Section 8 properties within the boundaries of the City and Steele is committed to finding additional opportunities to renovate and extend the affordability of these other properties which are also in need of substantial repair given their similar original age of construction to Shadyway, Somerset and Greenway Park.