Housing group wants new loan
Mountainlands Community Housing Trust, the group building the long-delayed affordable-housing complex on Deer Valley Drive, wants City Hall to loan it $250,000 for the project.
If the loan is approved, it would escalate the government’s financial stake in a project that has run almost $1 million over budget and taken more than two years longer to build than anticipated.
The request, to be considered by Mayor Dana Williams and the Park City Council on Thursday, comes 1 ½ years after the government loaned Mountainlands $100,000 for the project, known as the Line Condominiums. The group was unable to pay back the original loan on schedule and the government granted Mountainlands until 2011 to repay that money.
Mountainlands now claims it needs the additional $250,000 as a precaution as construction nears completion. Scott Loomis, the executive director of Mountainlands, said the new loan will cover bills for installing drywall, building cabinets and other finishing work.
He said Mountainlands expects to pay back the government within 30 to 45 days. Closings on the units are scheduled within a few weeks, providing Mountainlands with the money needed to pay back City Hall the $250,000, Loomis said.
"We are short of funds to finish. We may or may not need the loan," Loomis said, adding, "As they’re working on it, we may or may not have enough money to pay them."
The government said the $250,000 loan will be secured, or repayment guaranteed, through the property. The $100,000 loan is not secured.
City Manager Tom Bakaly said the government wants the original loan secured as a condition of the approval of the new request. securing the loans, if Mountainlands defaults, City Hall would have an ownership interest in the project, Bakalay said.
Repayment of the $250,000 would be due four months after Mountainlands draws on the money, he said.
Phyllis Robinson, the City Hall staffer assigned to affordable-housing issues, on Monday issued a report recommending that the Park City Council approve the new loan. The City Council meets Thursday to consider the request.
The government had previously waived fees at the project, 555 Deer Valley Drive, and provided Mountainlands with an easement, totaling $115,000.
The project has stressed relations between City Hall and Mountainlands, particularly Loomis, for months and Thursday’s meeting may be tense if the elected officials press Loomis on the delays.
"If affordable housing was easy, everyone would be doing it," Bakaly concedes.
When Mountainlands broke ground in June 2003, Loomis predicted the project would be completed in about six months. The crews, though, encountered repeated delays, including a City Hall stop-work order that lasted about six weeks midway through the work.
As the delays mounted, the prices of the units pushed much higher than those Mountainlands initially planned to charge. Mountainlands plans to sell the one-bedrooms for between $99,000 and $135,000 and the two-bedrooms will be sold for between $152,000 and $194,000. The prices are far lower than market value but are up significantly from those advertised when crews started the work. Those ranged from $60,000 for the smaller units to $130,000 for the bigger ones.
The Line Condominiums entail 22 units, 10 one-bedrooms, 10 two-bedrooms and the renovation of two historic houses that were on the property when Mountainlands acquired the land. People have qualified to purchase each of the units.
Mountainlands is a nonprofit dedicated to providing housing options for people otherwise priced out of Park City’s resort-driven real estate market. The Line Condominiums are among the group’s most ambitious projects.
Loomis has said that Mountainlands originally budgeted $2.3 million for the construction but that figure has bulged to about $3.1 million.
Bakaly said City Hall worries about the prices increasing again if Mountainlands is denied the new loan. Robinson said in her report that Mountainlands has used all the money from a construction loan from Zions Bank, which Loomis said in a March 22 letter to Bakaly was for a little more than $2.1 million.
Robinson indicates that if the City Council denies the loan, it would take Mountainlands another 60 to 90 days to get money from another lender and that, "until funds are secured, work would likely cease on the project."
The Line Condominiums will be one of the biggest affordable-housing projects built in Park City in a decade. City Hall has long seen itself as a chief affordable-housing supporter in the community.
The supporters say that offering lower-cost housing restricted to those who can qualify through their incomes brings desired diversity to the city. But opponents have in the past worried about falling property values and traffic when the projects are slated for their neighborhoods. There was limited resistance to the Line Condominiums as Mountainlands secured the necessary permits.
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