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Dunbar demo and reconstruction back on track, remaining JCHA rebuild plan on hold

Sue Guinn Legg • Jan 4, 2018 at 11:18 PM

After more than a year’s delay, the Johnson City Housing Authority’s plan to demolish the 60-year-old Dunbar public housing development and replace it with a new, energy efficient 80-unit apartment complex is back on track.

Executive Director Richard McClain said Thursday the authority has secured $13 million for the Dunbar rebuild: $12 million in tax credit financing from Regions Bank and $1 million in grant funding awarded by the Federal Home Loan Bank of Cincinnati through Bank of Tennessee.

Demolition of the Dunbar development on John Exum Parkway will be completed in February or March and construction of the complex will begin this spring.

Originally planned to begin in January 2017, McClain attributed much of the delay to federal tax reforms that have been anticipated since President Donald Trump’s election in the fall of 2016.

According to McClain, anticipation of the recently passed tax reforms resulted in months of uncertainty about the corporate tax credit incentive that is providing the bulk of the funding for the project. And in light of the pending reduction of corporate tax rates that compel large corporations to invest in low-income housing in order to the receive those tax credits, McClain said, “We were lucky to get what we got.”

“Other housing authorities that were in the same place we are didn’t get anything,” he said. “We are appreciative to Regions for giving us the funding they have. And we were lucky to get that grant.”

While the $13 million will cover the cost of the Dunbar rebuild, McClain said the Housing Authority’s plan to demolish and rebuild approximately 215 more of its aging public housing units has been put on hold for the foreseeable future or “until we figure out where out financing is going to come from.

At the same time, remodeling and energy efficiency improvements to another 300 JCHA units included in the rebuild plan is continuing, and will be expanded to more units as the demolition and reconstruction project is scaled back.

McClain said the project is part of a larger effort to convert public housing properties across the country to the federal Section 8 housing program for the benefit of both low-income renters and housing authorities nationwide.

For renters, the conversion is intended to provide more modern and energy efficient housing at about the same cost as public housing and to allow renters to transfer their eligibility to any public or privately owned Section 8 properties anywhere in the country.

For nonprofit housing authorities like JCHA, the conversion will, for the first time, allow the authorities own their properties and to use them as collateral to finance improvements, including more costly maintenance projects and property upgrades.

With the completion of the 80-unit Dunbar complex, McClain said JCHA will replace Dunbar’s original 30 units and move 50 of its 70 Fairview Housing Development units to Dunbar.

The 50 vacated units at Fairview will be demolished and the remaining 20 will be remodeled.

Demolition and reconstruction of JCHA’s Parkway, Memorial Park, Keystone and Carver housing developments are all on hold at this time, McClain said.

Email Sue Guinn Legg at slegg@johnsoncitypress.com. Follow her on Twitter @sueleggjcpress. Like her on Facebook at facebook.com/sueleggjcpress.

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