Group resists using city funds for tax credits

Proponents say the Arts and Creativity Complex on Siler Road would get the boost

A proposal to sweeten an application for federal low-income housing tax credits with city funds encountered stiff resistance Monday night at the city Finance Committee meeting, with councilors making clear they would have difficulty swallowing the request for an additional financial commitment that the project’s proponents say would all but ensure the Arts and Creativity Complex on Siler Road receives the credits.

The sticking point is the developers’ request to effectively shift $200,000 from a capital improvement project or projects elsewhere in Santa Fe to the Arts and Creativity Center proposal, a 60-unit affordable live-work development targeted at workers in the local creative industries.

Developers also have requested $200,000 from a wastewater fund balance.

The $400,000 would help close a $1.5 million funding gap the project’s backers say could imperil their application for federal tax credits to help finance the multimillion-dollar complex.

“We wouldn’t be here asking for this unless we absolutely had to,” said Daniel Werwath of New Mexico Inter-Faith Housing Corp., one of the project’s backers.

The city has already agreed to donate a 5-acre parcel on Siler Road, as well as waive impact and land-use fees. The lot was most recently appraised at $1.3 million, and the value of the fee waivers is estimated at $400,000.

City staff Monday night said additional money could be needed to move city materials from the property, the former site of a sewage treatment plant. Acting Public Works Director John Romero said that would cost at least $200,000.

“It’s a project we want to be excited about, but this is hard,” said Councilor Signe Lindell, calculating the city’s total commitment, including the requested $400,000, at $2.3 million. “The creep of this is painful.”

Councilors, while generally saying they supported the aim of the project, bounced it back to the Public Works Committee, which has already approved the resolution.

But time is of the essence, Werwath said: The application to the New Mexico Mortgage Finance Authority is due Feb. 13. The project hopes to win $8 million in federal credits — a significant chunk of its $14 million budget — under a program that encourages investors to help finance affordable housing projects in exchange for tax breaks.

Inter-Faith Housing and Creative Santa Fe, another backer, have ponied up an additional $500,000 to help close the gap, Werwath said.

“There are constituents waiting for those projects, and there are constituents waiting on this project as well,” Werwath said. “These are all public benefit projects. Hopefully this one is an investment that brings money back to the city long-term.”

Werwath said the additional city money from capital improvement and the wastewater funds would improve the project’s application scoring to the point its approval would be a near certainty.

He and Alexandra Ladd, director of the

city’s affordable housing office, described the $400,000 request as an expression of commitment from the city rather than a hardand-fast promise of where certain funds would come from. It is possible, Ladd said, other sources of affordable-housing funding might materialize once the project receives the federal tax credits and before construction begins, leaving capital improvement projects alone.

“I understand it is an inelegant approach, and I have no desire to bump other projects,” Werwath said. “I’m fairly confident we can find other funds to replace the roads funds. I just don’t think we can do it before February.”

“This is at the last minute,” Councilor Carmichael Dominguez said. “I’m just wanting to make sure we look at all the options that are available. … It’s not clear to me that we’ve done that.”

“It puts us in a pickle,” he added. “Who’s gonna give up a [capital improvement] project to make sure Daniel gets his project done?”

Councilor Peter Ives, a cosponsor along with Mayor Javier Gonzales, suggested there might be $200,000 in the city’s capital improvements budgets that was not already committed to a project and said he would ask for clarity at the Public Works Committee, which he chairs.

“I would hate to see us in the 11th hour — or even closer to midnight — fail in this endeavor,” Ives said.