SOUTH BEND — Developers have added hundreds of upscale apartments to downtown South Bend in recent years but a Fishers-based company says the city’s core, like many others around Indiana, needs more housing for the working poor.
Real America, which in 2016 renovated the former Hotel LaSalle into the high-end LaSalle Apartments, is asking the city’s common council for a property tax abatement to build up to 127 units on an empty lot the city owns at 504 S. Lafayette Blvd. The site is now used for parking during South Bend Cubs games.
The company would build two four-story, 60-unit buildings and seven townhouses. One of the buildings would contain apartments for tenants earning up to60% of the city’s roughly $40,000 annual median household income. The other building’s 60 units and the seven townhouses would be leased at market rates.
The development would be called “Diamond View Apartments,” for the proximity of the baseball stadium.
“We like the redevelopment that’s going on down there,” said Real America Vice President of Development Jeff Ryan. “The baseball field is a nice amenity, the new Ivy apartments there, easy access to the downtown, the bus lines, nice access to jobs that will be coming to the old Studebaker buildings and the technology center, all of this appeals to us about this area.”
South Bend development:Developer likely will ask South Bend to help build East Bank parking garage
There’s an important caveat to the plans. They hinge on the Indiana Housing and Community Development Authority granting the company tax credits that make the project more attractive to investors. The state agency awards only about 40% of developers’ applications for the credits.
“It’s very competitive and we never know what our competition is,” Ryan said. “There’s a 140-point scale and the difference between winning and losing is often only a half-point.”
Ryan and Santi Garces, the city’s community investment director, said they hope three factors will help boost the application in the IHCDA’s eyes: local support, as evidenced by the property tax abatement; and partnerships with Logan Center to reserve 12 units for its clients and with the Housing Authority of South Bend to house tenants with project-based U.S. Housing and Urban Development rental assistance vouchers.
“We’re really optimistic,” Garces said. “This proposal is very strong. Obviously there’s uncertainty, but when we have these different partnerships … a mix of incomes leads to better outcomes. We’re really hopeful that we’ve checked a lot of boxes for the state.”
Liberty Mutual building:Transformation into a Mishawaka city services center begins
Ryan said the company’s developments around the state feature a variety of income mixes. The closest mix to the South Bend proposal, Ryan said, would be its 95-unit Lake Park Apartments in Hobart, where 71 units are income-based and 24 are market-rate. In Fort Wayne, Real America operates a 72-unit development with 64 market-rate apartments and eight available to low-income tenants.
Ryan said he couldn't yet show a rendering of how the apartments might look because they would be designed to match downtown architecture styles and character, but he said both 60-unit buildings would be built of similar quality. In the affordable housing building,people earning 30% of the city's median income would pay $320 in monthly rent for a one-bedroom unit and $425 for three bedrooms, while those rents would range from $725 to $1,000 for people with incomeat 60% of the median.
The market rate rents would be similar to those across the street at the Ivy at Berlin apartments, which range from $1,000 to $2,000 monthly.
Several council members praised the project for attempting to mix income levels.
The council Monday night conducted first reading of the abatement request and will have a public hearing and final vote at its next meeting July 12. The company has told the city it mustapply for the state tax credits by July 26 and expects to know by Nov. 18 whether it has won them. If so, construction would start in the spring and finish by mid-2023, Ryan said.
The state tax credits require the city to pay for at least 10% of the project, which the city would meet by donating the land for the $19 million project, Garces said. Under terms of theabatement, the project would generate $436,000 in property taxes annually after eight years, compared to no taxes paid now since the land is city-owned.
Similarly, the LaSalle Apartments building, for which Real America also received an abatement,had generated no property taxes from 2013 through 2015, and the company has paid $180,000 in taxes since 2016, Garces said.
