5 Comments to 'Is your home worth $200 a square foot?'
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Is your home worth $200 a square foot?
Posted By katie allison granju
That’s the question Bill Pittman is asking in regards to the Volunteer Ministry Center (VMC) Minvilla project on Broadway:
Last Thursday, Ginny Weatherstone (VMC Executive Director) graciously gave a few folks a tour of the Minvilla structure. Besides myself and Ginny, other attendees included architect Dan Schuh, City employee Robert Finley, Ten Year Plan leader Jon Lawler, nearby resident David Nix and Dept. of Community Services employee Mike Dunthorn. A few key points and/or observations that came from this meeting:
a. Complete project funding is not in place.
b. A final construction contract is not in place.
c. The structures have sat unsecured and continued to deteriorate since VMC took possession.
d. Approximate site/construction project cost will be ~$200/ft2.
e. The estimated cost of the project has nearly doubled in just 18 months.
f. Jon and Mike asserted that Knoxville is not out of the norm in having such concentration of homeless services.
g. Mike agreed to quickly supply me, via e-mail, with a list of cities, similarly sized to Knoxville, that have the aforementioned concentration.
h. Ginny expressed that because of her emotional ties to the project, it would be hard to abandon at any cost.
i. Jon agreed that if an alternative location at a much lower cost could be acquired, the project could be relocated allowing Minvilla to be sold to private developers.
j. Approximate construction time will be ~1 year.
k. New construction would be much cheaper.It is quite disturbing to think that since acquisition, VMC has allowed further deterioration of this building but more importantly, our community should ask two important questions:
1. Does it make sense to spend ~$200-300 per square foot on apartments that are designed to be a “housing first” initiative for those just coming off the streets?
I think that the city’s plans for revitalizing the North Central corridor would be greatly enhanced if those gorgeous old buildings were turned over for private development, and a new site - elsewhere - were chosen for the VMC project. This would lower the concentration of homeless services clustered in that area, and would allow the folks moving into an alternate transitional housing site to get back on their feet without being surrounded by the temptations and people who helped keep them on the streets in the fiirst place. Plus, those buildings offer tremendous potential for becoming an absolute showplace for private residence condos, professional offices, etc. The Minvilla could become an anchor site for the North Central redevelopment plan.
Your thoughts?
Jul 18th, 2008
Heck no, it’s not worth $200 sq/ft. I live in a unique and very lovely condo and units in our building go for $85 sq/ft. There are a few units that have been on the market for over and year because the owners are trying to sell for $125 sq/ft. and no one is buying.
I want to correct some misinformation with this comment. I’ll spare you the torment of trying to answer every conceivable question you might have, and hopefully I’ll bring you a little closer to understanding why this project costs what it does and what is its purpose.
So let me bring you up to speed on a few aspects of Minvilla.
Cost: well below $200/sf.
Minvilla is an expensive project because it’s historic rehab. When early estimates hit the papers and the pixelverse, they were very low. The former developer made the best estimate that he could with the information he had at the time. We now have much better information (completed construction documents, for one thing) and a firm estimate. It is much higher than the preliminary one to which people indexed their expectations, but it is also realistic. Based on revised cost estimates and post-rehab square footage, the cost is well below $200 per square foot.
Corporate investors will supply approximately 75% of this project’s funding. The investors who purchase the equity generated by historic tax credits and low-income housing tax credits, the bank issuing the mortgage, the Federal Home Loan Bank, all of those are ultimate sources of funding for this project and others like it. These investors see this project as a good investment in our community, and their dollars could come to Knoxville from anywhere.
Another 25% of the funding for Minvilla will be public funds set aside by the Federal Government for the purpose of making housing available to those who otherwise couldn’t afford it. Other dollars are set aside by the Feds to be disbursed by local entities like the City and County, both of which are committed to ending chronic homelessness.
Developer interest
Nobody involved with this project is seriously entertaining notions of developing some other permanent supportive housing project in lieu of Minvilla or of selling the property to a private developer. Any professional developer who considers purchasing this property is probably going to be aware that prior to its transfer to Volunteer Ministry Center, at least two different developers tried to make a go of something there and couldn’t make the numbers work. That was in a much stronger real estate market with much lower construction costs than today’s. If Minvilla were such an attractive property to developers, VMC would not own it right now.
Too, Minvilla has access to low-income housing equity to the tune of about $2 million. That’s around a third of this project’s financing. That money goes away if you do a market rate project there.
Expansion of what?
Minvilla does expand the footprint of VMC in 5th & Broadway. That is a technical fact. But Minvilla’s not a business-as-usual expansion of homeless services in the mission district. And that is the truth.
Minvilla is permanent supportive housing, which is the proven, effective approach that we will use to end chronic homelessness in Knoxville. Minvilla’s not going to be a shelter or transitional housing or a feeding program or a street ministry or a sidewalk-strangling swarm of panhandlers. Instead, it’s going to be an apartment complex that will house rent-paying residents.
All of Minvilla’s residents will have some things in common: relationship with a case manager, some form of income, accountability, healthier relationships. The most significant of those things they’ll have in common? They won’t be homeless anymore. They’ll be like this guy: http://www.wbir.com/news/local/story.aspx?storyid=53221
Gary Waddell is the kind of resident who’ll be at Minvilla. He’s one reason that it’s fair and true to say that Minvilla does not represent an expansion of service to homeless people. Minvilla is about ending homelessness.
Robert Finley
Ten-Year Plan
215-3071
rfinley@cityofknoxville.org
http://knoxtenyearplan.org
Robert,
Bullsh*t! Everyone in the downtown area is well aware of what you guys are trying to pull. Your rationale is faulty at best. You have done nothing to explain why new construction away from the perils of Broadway would not be a better option. Please enlighten us.
Amanda
Amanda,
Perhaps you can enlighten me on one point. I don’t know what you mean when you say, “Everyone in the downtown area is well aware of what you guys are trying to pull.” I honestly have no idea what that’s about.
I also don’t understand to which rationale you refer. I’ve made a bunch of them here.
I have spoken to the whole idea of “better options.” I’ve said that such a discussion is beside the point at this time. This project is underway, and the people who are responsible for making it work as permanent supportive housing (VMC) believe it’s a good location for that purpose.
Their optimism is based on their experience of what actually happens, not just on gut feelings or common sense. When someone moves off the streets and into permanent supportive housing with its built-in support and accountability, and in this case proximity to key resources like the case management and other programs across the street at VMC, and the employment program resources down the block at The Salvation Army, they can succeed even in a crazy environment.
One example. There are, right now, already a decent number of folks in transitional housing programs at SA, which is right in this very area. They’re not all formerly chronically homeless, but the majority of them still have serious issues of the very same kind we’re talking about, and they’re staying clean and sober, and working, and learning, and doing the other stuff they’re supposed to be doing, right in the midst of the same scene. I know it’s tough for them, because I have met and talked with some of them, and it may defy logic, but many of them are succeeding. Right beside Minvilla. Right now.
Best,
Robert
Robert,
Just because a bad idea is already underway does not make it a good idea! shame on you. Also, please don’t try to sell me on the housing first initiative, I am already on board. I am just emphatically against spending taxpayer money (yes all of those federal housing dollars) on a project that is 2-3 times more expensive than it should be. We are asking you guys to be fiscally responsible. Is that too much to ask? I also don’t care if you have private investors on board. You have used $400,000 in block grant money, unknown amounts in tax credits, and HUD money. So yes, this project needs to be accountable to the community - the tax payers - the HUD and Block grant BENEFACTORS, if you will.
This project does not make sense in terms of dollars and cents. Why not put the apartments and the VUMC facility (that will sit on the lot that the tax payers paid 400,000 dollars for) in the same building, not on broadway, not next door to the drug dealers and prostitutes?
But really, I am not sure that anyone really believes that you guys will ever start construction anyway. I mean it has been 18 months and the buildings have just sat there and rotted even more. Is the funding in place? Is there a construction contract and time line? Will there be trash outside the facility? Who will pick it up, the same people who pick up the trash under the bridge? What will you do when your rent-paying residents cant walk into their building because there are too many human bodies laying and sitting and standing in front of the building? You know, like they do now.