Fairstead, a development firm from New York City, plans to renovate the historic Aurora Apartments tower in Tobin Hill and install a much-needed sprinkler system with the help of federal low-income housing tax credits, allowing the building’s elderly residents to stay in their units.
The firm, which specializes in buying and renovating affordable housing nationwide, hopes to buy the building from its current owner, developer Mitch Meyer, and begin renovation work next summer, said Jordan Capellino, its vice president. It is preparing to apply for the tax credits after the San Antonio Housing Authority (SAHA) voted on Thursday to issue $20 million in bonds for the project.
The $31.7 million project at 509 Howard St. is Fairstead’s first in Texas, and the firm is looking to do more, Capellino said.
“We’re really excited to be able to begin construction and close on this project,” Capellino said. “It’s a really unique opportunity to extend long-term affordability and preserve a really beautiful historic building.”
Under Fairstead’s ownership, half of the building’s 105 units would be reserved for residents making up to 50 percent of the area median income, or about $37,000 a year for a family of four, and the other half for those making up to 60 percent, or $44,460 a year, according to the SAHA agenda.
[ Scroll down for a chart showing AMI levels. ]
Nearly all of the building’s current residents are senior citizens making below 30 percent of the area median income, who rely on vouchers from the U.S. Department of Housing and Urban Development to pay their rent. Capellino said that they will be able to stay in their units and that the rent they pay will not increase under the new ownership because their vouchers subsidize their rent based on their income.
“Our hope is that residents will be able to stay in the apartments during renovation,” he said.
The $20 million in bonds will be issued by the Las Varas Public Facility Corp., a SAHA nonprofit, allowing Fairstead to apply for federal low-income housing tax credits, which in Texas are distributed through the Texas Department of Housing and Community Affairs (TDHCA).
Meyer, who has owned the Aurora since 2007, revealed a plan earlier this year to transform the building into a hotel while constructing an apartment tower nearby, at 311 W. Laurel St., to house the current residents. The plan involved applying for $15 million in tax credits from the TDHCA.
In a text message, Meyer said the plan couldn’t proceed because he wasn’t successful in getting the tax credits.
“Small inner-city developments (150 units or less) don’t make financial sense without” low-income housing tax credits, Meyer said.
Built in 1930 as a luxury hotel, the Aurora has for years intrigued developers as a possible rehabilitation project, especially as downtown and Tobin Hill have experienced a housing boom. But the building suffers a wide range of maintenance problems—notably, a widely-reported bedbug and roach infestation in 2017—and lacks a sprinkler system, which have made its rehabilitation difficult.
The city has required that all high-rises install sprinkler systems by 2028 after a fire claimed six lives at the Wedgwood senior living tower in Castle Hills in 2014.
“You ever have an old car that you love, but it keeps breaking down?” Meyer told the Heron in February. “These old buildings just get really expensive to operate… It’s really hard to put a sprinkler system in when people live there. I mean, the building is solid concrete.”
2021 Area Median Income
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|Source: U.S. Department of Housing and Urban Development|
Richard Webner is a freelance journalist covering Austin and San Antonio, and a former San Antonio Express-News business reporter. Follow him at @RWebner on Twitter
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