The Massachusetts investment company interested in purchasing Maple Courts Apartments will not request a tax-abatement package.
Charles E. Allen, a principal for Evergreen Partners LLC, Ipswich, Mass., said Monday his firm will rely instead on state housing tax credits to purchase the 92-unit, affordable-housing apartment complex off Weldon Avenue for $3.7 million and then spend $7 million to renovate it.
Evergreen Partners has applied for $9.2 million in housing tax credits from the state Housing and Community Renewal agency. The firm hopes to hear this summer whether the application was successful.
Evergreen Partners came into the picture after the Related Cos. of New York City bowed out in November after the Watertown City Council decided not to give the firm a 30-year tax-break package.
The $13.5 million project also includes about $3 million in architectural, development, professional, financing and other fees.
Mayor Jeffrey E. Graham pointed out the apartment complex for mainly low-income tenants sits next door to Ives Hill Country Club golf course and within one of the city’s nicest neighborhoods.
“Politically, we’re supposed to support it, but that seems like an awful lot of money,” he said.
In response, Mr. Allen said the 40-year-old complex has never gone through a major renovation since it was built. It’s also becoming more difficult to acquire funding for such projects. The work includes replacing windows, doors, flooring, HVAC equipment, bathrooms and fixtures. The complex includes studio apartments and one-, two- and three-bedroom units.
If the tax credits come through, Evergreen Partners would pay about $58,000 annually in property taxes to the city, Jefferson County and the Watertown City School District, said city Assessor Brian S. Phelps. The current owners, Maple Courts Apts., paid $37,778 in property taxes last year.
Evergreen Partners will not ask for any help from the city, except a letter of support that would be sent to the state, Mr. Allen said.
The Michigan-based Maple Courts Apts. had a 40-year payment-in-lieu-of-taxes package that expired last year. That group of investors, which included descendants of Henry Ford, was paying $12,000 a year in property taxes before the tax deal ended.
Tenants pay between $250 and $300 per month. Rent is projected to increase but be subsidized by the federal government through the Section 8 low-income housing program.
The complex is assessed at about $1.5 million but would approximately double after the improvements are completed and when the increased income from higher rents begins. A start-up date for the improvements will depend on the availability of the tax credits, Mr. Phelps said.