The Auburn Housing Authority will ask the Auburn City Council to approve two payment-in-lieu-of-taxes agreements Thursday that will help the organization continue renovating an aging affordable housing complex.
The PILOTs, which would be in effect for 40 years with annual payments of $6,000 a year — $3,000 for each agreement — will enable the housing authority to finish renovating apartment units at Melone Village, AHA Executive Director Stephanie Hutchinson said. In order to maximize funding for the renovations, the project had to be split into three separate phases, called Melone Village I, II and III.
The first phase is about halfway completed — out of the 62 units slated to be redone, 28 are complete and tenants were able to move into them in June. The rest of the units will be move-in ready by June 2019, Hutchinson said. The city previously approved a $3,000 PILOT for the first phase.
If the agreements for Melone Village II and III are approved Thursday, the housing authority will pay $9,000 a year to the city, which is more than the government agency pays now in taxes, Hutchinson said. Since the housing authority is a government agency, it only pays property taxes based on the land assessment. However, in order to get funding from the state and federal governments, the property needs to be privately owned, so the housing authority transferred ownership of the village to a private limited partnership. If it wasn't for the PILOT agreements, Hutchinson said, the housing authority would not be able to do the renovations because the taxes on the now-privately owned properties would be too high.
"Once all phases of the redevelopment are complete, the city will no longer have any liability for any portion of the Melone Village complex, as it will no longer be legally owned by the Auburn Housing Authority," Hutchinson explained in a background memo to the city council. "Instead, each phase will be owned by a private limited partnership and only managed by the Housing Authority."
The housing authority used the same funding strategy to renovate affordable housing units at Brogan Manor in 2015.
AHA plans to begin construction on Melone Village II in May 2019 and Melone Village III in May 2021. All 188 units should be completely renovated by 2023 and the whole project is estimated to cost about $40 million.
The next two phases will include new walls, floors, ceilings, doors, windows, ductwork and insulation in all the units. Building exteriors will be enhanced, and all roofs and porches will be replaced. The housing authority plans to improve drainage on site, add three more playgrounds to the property and a maintenance garage to store mowers and snow removal equipment. Additionally, sidewalks will be replaced and additional lighting and video cameras will be added. AHA will add eight new handicapped-accessible units and eight units equipped for those who have audio or visual impairments.