Despite plans announced in 2013 (subscription required) to turn low income living spaces in the historic Wilrik Hotel into upscale condominiums and/or retail space as early as 2018, the Rant has learned that federal tax credits associated with the property mean it must remain as low income housing until well into the next decade.
Connie Helmlinger, a spokesperson for the North Carolina Housing Finance Agency, confirmed to the Rant Tuesday that low income housing tax credits were awarded upon the sale of the Wilrik to Progress Energy in 1997. Although those tax credits reached their 15 year expiration in 2012, due to what’s called an “extended use period,” deed restrictions will remain in effect until at least 2027, Helmlinger said.
Those deed restrictions include that residents must come from “households at 60% or less of area median income.” The median income for a family in Sanford is about $42,000.
The revelation comes on the heels of the discovery that the federally-funded Sanford Housing Authority was never the owner of the historic downtown building. Rather, a nonprofit corporation set up by former SHA director Ken Armstrong purchased the building in 2013 after Armstrong apparently told city and county leaders the nonprofit was controlled by the SHA. The organizations, however, are entirely unaffiliated.
Sanford and Lee County helped subsidize the 2013 sale by forgiving roughly half a million dollars in debt. Again, media reports from the time indicate that Armstrong presented a plan to have renovations done to the inside and outside of the historic property and after five years transition the low income residents to other properties while the living spaces were remodeled into upscale condominiums.
Armstrong left his job at the Sanford Housing Authority in 2014 and left the board of directors of the nonprofit this year. The Wilrik Apartments are now controlled by the nonprofit’s two-member board of directors.
Minutes of a Sanford City Council meeting from March 9, 2011 show city leaders at the time had a discussion about low income housing tax credits.
“We determined that one of the major obstacles to returning for development as a market value property were the low income tax credits attached to the project,” the minutes read. “A few years ago, we met with executive and legal representatives of NCHFA to better understand this aspect of the project. The original tax credits were applied for a period of fifteen years. Assuming that the clock started ticking in 1997 when the property was purchased, then those credits remain in effect until the end of 2012. However, there was a provision for an extension of these credits for low income housing.”