HARLINGEN — Developers are getting a break in their proposed $4.5 million project to turn the city’s tallest building into a largely low-income apartment development.
Last night, city commissioners allowed City Manager Dan Serna to reimburse as much as $1,000 in building permit fees to MRE Capital in its proposed project to renovate the Baxter Building to its original condition.
Serna, in an earlier interview, called the reimbursement a “form of assistance” that came as a result of the “public-private partnership” between the city and the developer.
The city’s assistance comes as MRE Capital launches its second attempt to obtain federal tax credits to fund much of the construction costs in its plan to renovate the nine-story building into a 24-unit apartment development that would include 19 low-income units.
Early this month, city officials extended an agreement in which MRE Capital would pay the Harlingen Community Improvement Board $250,000 for the Baxter Building while investing $4.5 million into the building’s renovation — on the condition the developer qualifies for federal tax credits to fund much of its construction costs.
For the second time, the Kansas City, Mo., developer has submitted a pre-application for federal tax credits to the Texas Department of Housing and Community Affairs.
The deadline for final applications is March 1.
Around mid-year, the agency’s board of directors is expected to award federal housing credits.
Mayor Chris Boswell has called the project the most important in the city’s campaign to revitalize the downtown area.
Since the late 1960s, the nine-story office building has decayed to become a towering eyesore, hindering the 25-year effort to revive the area, including the Jackson Street District.
But many downtown property owners oppose the project, arguing lack of parking spaces would lead prospective Baxter tenants to take away parking lots from their customers.
Others also don’t want a low-income family apartment development in the downtown area.
The renovation of the vintage 1927 building appears to depend on MRE Capital’s success in obtaining tax credits to help fund the project.
This time around, the developer appears closer to launching one of the city’s biggest revitalization projects.
This year, the agency’s newly revised scoring criteria are expected to give MRE Capital a better chance of landing the tax credits, Serna said.
The agency, which offers up to five points for a project development site within public school attendance zones, has separated its public education points from its historic preservation points, Serna said.
Last year, when the project lost public education points, it also lost historical preservation points.
The project failed to receive funding, partly because prospective Baxter tenants’ children would attend Harlingen High School, which ranked below state academic standards.
As a result, the project fell short of scoring points as it competed with 13 projects in the hotly competitive South Texas Region 11.
MRE Capital was among four developers with scores of 155 points, while four projects scored 158 points and five others scored 157 points.
One project scored 152 points and another scored 151.
Last year, 66 out of a total of 125 applicants who filed for tax credits were awarded funding totaling $65.4 million.