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Tuesday, March 26, 2013

City may give Cotton Mill Square another $300,000 in federal HOME funds

NASHUA – Cotton Mill Square is looking for another $300,000 boost from the city to convert a historic cotton warehouse into 109 units of mixed income apartments.

On Tuesday, the Board of Aldermen will get its first reading of a resolution that would approve allocating $300,000 of the city’s HOME Affordable Housing Development funds, which it receives from the federal government, toward the Front Street rehabilitation project. ...

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NASHUA – Cotton Mill Square is looking for another $300,000 boost from the city to convert a historic cotton warehouse into 109 units of mixed income apartments.

On Tuesday, the Board of Aldermen will get its first reading of a resolution that would approve allocating $300,000 of the city’s HOME Affordable Housing Development funds, which it receives from the federal government, toward the Front Street rehabilitation project.

“There’s a two-year commitment period for HOME funds, and since we have no one applying and no Community Housing Development Organization looking to do anything that we’re aware of, we don’t want these funds to expire,” said aldermanic Vice President Lori Wilshire, who endorsed the resolution with President Brian McCarthy.

The city has to commit HOME funds to projects within two years of receiving them from the U.S. Department of Housing and Urban Development, Wilshire said.

The HOME program provides formula grants to states and localities that communities can use with local nonprofits to build, buy and/or rehabilitate affordable housing for rent, ownership or rental assistance to low-income people, according to HUD’s website.

Not only does the city have the HOME funds to burn, Wilshire said, it also needs to make up for a funding shortfall from Clocktower Place’s failure to refinance its mortgage and reimburse the city $300,000 that it planned to use to renovate Jackson Falls Dam for Cotton Mill Square.

Last summer, aldermen approved two agreements that will modify the dam – downstream from Front Street and across from the Nashua Public Library – with crest gates, pulling more than 70 downtown businesses out of the 100-year floodplain and making Cotton Mill Square eligible for certain federal tax credits in the process.

If Wilshire’s bill passes, the city will have allocated more than $1 million in HOME funds toward Cotton Mill Square, a project of prominent Nashua developer John Stabile. Aldermen unanimously authorized Cotton Mill to use $364,000 and $376,000 of the city’s HOME funds in 2011 and 2012, respectively.

“I think Casmir Place might have gotten somewhere in that range of funding but this is a bigger project,” Wilshire said. “I think it’s a good use of the funds. It would’ve been nice if they didn’t come back for that money, but on the other hand, if it’s not committed in the 24-month period – it’s use it or lose it.”

Cotton Mill Square got its final approval from HUD to start construction in February.

Years in the making, the $26 million project includes $10 million in historic and low-income housing tax credits, more than $1 million in Stabile Co. equity, $2.2 million in city and state HOME funds, more than $600,000 in EPA loan funds, and $1 million in Community Development Finance Authority state tax credits.

The Board of Aldermen also approved a five-year tax hold on Stabile’s project through the city’s Community Revitalization Tax Relief Incentive Program. When Cotton Mill Square is complete, The Stabile Co. upgrades will nearly double the taxes the city collects on the property, which Stabile has paid on the vacant property for 10 years.

The city tax relief program, which adopted a state law, supports the rehabilitation of blighted downtown areas into useful projects that benefit the public.

Along with new apartments – more than half of which will be affordable to residents making 50 to 70 percent of the median area income – Cotton Mill Square will bring 160 new parking spaces on Front Street, drainage improvements to the Millyard and add 1,200 feet to the Nashua Riverwalk.

Maryalice Gill can be reached at 594-6490 or mgill@nashuatelegraph.com. Also, follow Gill on Twitter (@Telegraph_MAG).