Housing project clarified

McCOOK, Neb. -- McCook Economic Development Corp. Executive Director Rex Nelson has provided additional details about the Clary Village Project in response to a March 13 Gazette article, "Clary Village Next Keystone?"

According to Nelson, the Clary Village project will bring much-needed housing to McCook just as Kelly Creek Apartments, Maplewood, Landmark Apartments and East Ward Village did. All of those projects, as well as the proposed Clary Village Project, have used Low Income Housing Tax Credit (LIHTC) funds.

McCook Economic Development Corporation will take a one percent ownership interest in the project and act as registered agent. This is a typical structure for a project using LIHTC funds, as one requirement is to have local ownership. Nelson went on to explain that MEDC also holds a one percent ownership interest in Kelly Creek Apartments, and the corporation receives annual financial statements from that organization.

MEDC housing department plans to manage the Clary Village rental units for about $8,000 annually, offsetting recent reductions in other funding sources for the housing department. "Our pressing housing needs require that we exploit every resource available, and this is one of the few that we have access to, though not without local skin in the game," said Nelson. "MEDC isn't doing this because they want to, but because it needs to be done and they exist to serve the community."

At Monday's meeting, McCook City Council approved two loans for the Clary Village project. One was a $120,000 equity loan from the Revolving Loan Fund, and the other was a $196,750 loan to MEDC from the city's McCook Economic Development Fund to finance infrastructure for the project. According to Nelson, the infrastructure includes sewer lines that will also serve two blocks to the west of the project.

Nelson went on to explain that the low-income units rent for about one fourth of their market rate value. Because there is little profit in low-income housing, the loans from the city represent roughly a 10% community stake in over $3 million in new housing, as well as provide some of the infrastructure for two more blocks of developable property.

According to Nelson, when Nebraska Investment Finance Authority is scoring these very competitive applications, they expect the community to invest too. The economic development sales tax provides local resources to make these good projects happen. Very few of these projects are going to rural communities because the high cost of construction makes them score poorly. Again, the local investment is what makes them work.

Nelson also explained some figures used in the story about funds received from the LB840 Local Option Sales Tax for Economic Development. The tax currently generates about $400,000 annually for economic development, but McCook Economic Development Corporation only receives approximately $130,000 directly from the tax. The remainder of the funds generated from that portion of the sales tax is held by the City of McCook. MEDC administers the program and allocates funds for projects. Many of those projects, including Clary Village, also require additional city council approval and the approval of a city-appointed loan committee.

The City of McCook issues the checks when those funds are used.