Subsidized affordable housing could be sold to private developer

SEATTLE — The Squire Park Plaza Apartments were built seven years ago with tax credits and federal loans, under an agreement between the city of Seattle and the Central Area Development Association, or CADA.

In the agreement, the nonprofit had to have retail on the bottom floor, with at least 51 percent of residential units made affordable for people making less than 80 percent of median income.

For example, a family of four making less than $70,000 in 2014 would pay no more than $1,588 for a two-bedroom apartment.

Currently, tenants said 73 percent of the units are made affordable, while 27 percent of units are leased at market rates.

A private investor would only be required to abide by the covenant to maintain 51 percent at reduced rates through 2027. Tenants worry that will reduce the number of affordable units and that all units will eventually be renovated, causing rents to increase dramatically.

“Squire Park Plaza was, and remains, one of very few affordable options to remain here in Seattle,” said Dennis Rudnick, a graduate student and teacher who lives in the building.

Rudnick and his wife, a social worker, are raising an infant son.

“If mixed-income housing is no longer an option, we have no choice but to move elsewhere,” Rudnick said.

With at least one commercial space vacant, and a finance term expiring in August, CADA can either refinance or sell. It has opted to sell, and there is currently considering three offers.

The CEO of CADA, George Staggers, told KIRO 7 two of the offers are from other nonprofits.

“All of the nonprofit options are hoping the city or other public financing will take over the $2.8 million -- and that is neither likely, nor available. With the choice for covering that loan with private funds that are being offered versus public funds that are not available, we are choosing responsible financing,” Staggers said.

The city of Seattle Office of Economic Development said whoever owns the property is responsible for the HUD loan payment. A nonprofit would have to make payments on the loan and show it has the financial capacity to do so.

One of the nonprofits offering to buy the building is the Low Income Housing Institute. The executive director, Sharon Lee, said they have grant awards to use to cover that $2.8 million.

Lee said they would set some of the units’ rents even lower, and keep the same affordability ratio in the building for another 50 years.

Staggers said CADA will make a decision in the next week.

Representatives of the Office of Economic Development said they support CADA in holding a competitive bid process.

KIRO