PARIS — At Avesta Housing’s request, selectmen agreed to extend the purchase and sale agreement on the Mildred M. Fox School by one year so the nonprofit can fill a $90,000 funding gap.
At the Feb. 27 selectmen meeting, Town Manager Vic Hodgkins informed the board of the request to extend the agreement for the historic school on East Main Street.
In August 2016, Avesta bought the three-story brick building from the town for $125,000 to transform it into affordable senior housing.
“They’re going to need a little more time than what the original agreement called for,” Hodgkins said. “And in that contract that we did sign, there is an option for them to exercise a second year.”
Board Chairwoman Janet Jamison asked Hodgkins about the deposit that was part of the agreement: an initial $5,000 and another $5,000 later.
“Initially, we got a $5,000 deposit that we would have had to return had the deal gone south,” Hodgkins said. “With the second $5,000, both monies now become hard. In other words, if the deal went south once this is executed, we would not have to give back that $10,000. It’s ours.”
Selectmen voted unanimously to extend the contract by one year.
Greg Payne, a development officer with Avesta Housing, said he did not think the nonprofit would need a full year to figure out how to fill the $90,000 funding gap, which he said is caused by the national discussion of lowering the corporate income tax rate.
“It could have easily been a three-month extension and that would be fine,” he said. “Right now our expectations are we will be able to reach a construction closing and begin construction at the end of July. There are kind of a lot of moving parts along the way and finance pieces that need to come along the way, including the historic tax credits.”
The funding gap, he said, stems from President Donald Trump saying he wants to lower the corporate tax rate.
“What is happening is the investors in low-income housing tax credits are hearing what the president is saying and what Congress is saying and (it’s) making them re-evaluate how much they’re willing to invest,” he said.
A few months ago, investors told Avesta Housing they were willing to pay 97 cents on the dollar for their tax credits, Payne said. Now with talk of lowering the corporate income tax rate on the horizon, investors now only want to pay 85 cents or so on the dollar.
“In the case of the Fox School, that creates a hole of $90,000,” he said.
When Avesta and the town closed on the deal last summer, the plan was to begin creating 12 one-bedroom senior apartments.
It’s estimated the project will take eight months to complete. When it is about half done, Avesta Housing will begin soliciting applications.
Tenants must be 55 or older with incomes at or below 60 percent of the local median income. Rent, which will include all utilities, is projected to be $519 for eight units and $623 for four units, according to Payne.
Despite the funding gap, Payne said he remains optimistic about the project.
“We are proceeding forward. Design development is continuing,” he said. “We’re excited to make this happen.”