By PETER HUSSMANN
The Iowa Finance Authority announced on Wednesday that the Ohio developer's proposal to build a new senior housing complex northwest of the downtown Newton square was one of 12 projects statewide that will receive federal housing tax credits this year.
Cincinnati-based Miller-Valentine Residential Development received a housing tax credit award of $800,000 for the construction of 53 affordable apartments for persons older than 62. Statewide, 12 affordable housing projects received more than $7 million in federal housing tax credits to build and preserve 635 affordable housing units.
The Iowa Finance Authority had received 38 applications seeking more than $19.8 million in housing tax credits.
The Internal Revenue Service makes an annual per capita allocation of federal tax credits to each state for the housing tax credit program. The Iowa Finance Authority is charged with allocating the credits to developers of affordable housing in the state. IFA had more than $7.1 million to allocate in this year's tax credit round.
Developers who receive tax credits sell them to investors to generate equity for the housing developments. The tax credits provide a dollar-for-dollar reduction to the investor's federal tax liability on ordinary income. The actual awards exceed $70 million because the credits are committed annually for a 10-year period.
The development proposal was contingent upon receipt of the federal tax credits.
Last year, the Newton City Council agreed to several financial incentives as part of the development proposal. A preliminary redevelopment agreement approved by the council in December calls for at least $150,000 in infrastructure assistance and a tax rebate of $25,000 a year for 10 years.
Prior to that, the council agreed to sell to Miller-Valentine a city-owned parcel of land north of the 200 block of North Fifth Avenue West for $25,000.
The 53, all two-bedroom unit structure is planned to be constructed on the full block south of the city land owned by Newton Enterprises, the Grinnell-based firm that purchased the former Maytag headquarters complex from Windstream Corp. for $1.
Miller-Valentine had previously estimated construction cost of the senior housing complex at approximately $6 million with overall project costs estimated at $10 million.
The Newton Housing Development Corporation, as well as other local development groups, assisted in the development proposal.