Tax credits lower costs of living Downtown
People who want to live Downtown but can’t afford the expensive condominiums or steep rents that now dominate the market finally may have an option.
It’s a 100-year-old building on Seventh Street in the heart of Pittsburgh’s Cultural District.
A plan to convert the 12-story Century Building into affordable apartments cleared a key hurdle this week when the Pennsylvania Housing Finance Agency awarded $515,155 in federal tax credits for the project.
The approval, announced at a news conference yesterday, will enable Trek Development Group to press ahead with the construction of 60 upper-floor apartments, including single-room studios and one- and two-bedroom lofts.
Rents will range from $550 to $1,150 a month, depending on income level, in a Downtown market where studio rents currently are $868 to $909 a month and two bedrooms go for $1,035 to $2,002 a month, based on whether there’s one or two bathrooms.
Mayor Luke Ravenstahl said the $16 million Century Building project has been a priority for him since he got into office a year ago because of its potential to attract a broader mix of people into the Downtown residential scene.
“Downtown Pittsburgh is on its way back. It’s revitalizing, and it’s because of projects like this that we’re going to be able to look at a significantly different Downtown, in my opinion, in the years to come,” he said.
Until now the residential surge Downtown has been fueled in large part by luxury condominiums with price tags starting at roughly $230,000. Many units are selling for $300,000 or more, with a few topping $1 million.
Apartment rents at the Encore on 7th high-rise a few doors down from the Century Building are $1,400 to $3,275 a month.
While housing has helped to boost the fortunes of the Downtown district, it has been out of the reach of many people because of the price.
At the same time, Pittsburgh Downtown Partnership research has found a “tremendous demand” for a middle range that includes young professional housing and work-force housing, said Patty Burk, vice president of housing and economic development.
“Delivering this building will be the first step in meeting that demand and helping Downtown be for everyone,” she said.
Part of the problem in providing more affordable housing in downtowns, here and elsewhere, is the high cost of construction, which leads developers to focus on the high end to turn a profit. Lower pricing typically requires some form of subsidy.
For example, Washington County-based Millcraft Industries, another developer seeking to bring more affordable housing Downtown, sought federal historic tax credits to help make the numbers work. It is converting part of the old G.C. Murphy store into 46 loft apartments, with rents to range from about $775 for a 620-square-foot studio to $1,875 for a 1,500-square-foot penthouse.
William J. Gatti Jr., president of Trek Development Group, said the $515,155 in affordable tax credits was “vital” to the conversion of the upper floors of the Century Building into housing. He said the project could not have gone forward without them.
“The price point that we’re attempting to make units available for would not be enough to amortize the debt necessary to develop the building and to carry the cost. So we absolutely need the tax credits to make it work,” he said.
Trek plans to target young professionals, artists and middle-income renters. It plans to offer 12 single-room studios, 12 two-bedroom units and 36 one-bedroom units.
“It is fitting that exactly 100 years after its original construction we are announcing the rebirth of the Century Building as Downtown Pittsburgh’s first truly affordable residential loft community,” Mr. Gatti said.
Trek intends to pursue an environmentally friendly LEED certification for the building, which also will include a green roof and geothermal heating and cooling. There also will be a roof deck with city and Allegheny River views, an equipped exercise room, a community club room and a business center.
Apartment amenities include garbage disposals, dishwashers, and washer and dryer hook-ups.
Besides the PHFA tax credits, project funding includes nearly $3.2 million from the Pittsburgh Cultural Trust, $2.3 million in loans from the city’s Urban Redevelopment Authority, $2.3 million in historic tax credits, $2.3 million in loans from the Strategic Investment Fund and $750,000 in loans from the county’s economic development department.
Trek already has been doing preliminary demolition work within the building. Construction should be in full bloom next year, with apartments ready for occupancy in early 2009.
The Century Building conversion is considered another key addition to the thriving Cultural District. It’s expected to complement the Cultural Trust’s half-billion-dollar RiverParc project, the first phase of which involves the construction of some 700 units of housing on the Allegheny River at Eighth Street, at a cost of $90 million.
Allegheny County Chief Executive Dan Onorato said Downtown will be “the place for the next decade or two where activity” will be growing. He said the county is committed to making sure the Golden Triangle, as the hub of the region, continues to move forward.
“We’re on a roll. You can easily fall off that roll if you don’t pay attention to what we have here and the assets that we have. So Downtown Pittsburgh’s going to remain a focus for the next several years for all of us involved here,” he said.
First published on September 13, 2007 at 12:00 am
Mark Belko can be reached at firstname.lastname@example.org or 412-263-1262.