CRA approves amendment to 2008 Palmer Court loan to allow longer lease terms for deeply affordable units
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Summary
The Salt Lake City Community Reinvestment Agency on Aug. 12 approved a modification to a 2008 $3 million forgivable loan for Palmer Court that removes a strict short-term SRO requirement for 60 units to enable LIHTC financing and project-based vouchers and to prioritize current residents for relocation into new replacement units.
The Salt Lake City Community Reinvestment Agency board on Aug. 12 voted to adopt a resolution amending the CRA's 2008 forgivable loan for Palmer Court, allowing the property's owner to replace a requirement that 60 units be operated as short-term single-room-occupancy rentals with leases compatible with Low-Income Housing Tax Credit (LIHTC) financing and project-based vouchers.
Brown Seabright, project manager, told the board the amendment would support a planned redevelopment called Gardens at Palmer and allow residents to relocate from the existing Palmer Court building into newly built, trauma-informed units. "We are coming before you with a proposed loan amendment to the Palmer Court loan," Seabright said. He described Palmer Court as a 201-unit permanent supportive housing project converted from a Holiday Inn and redeveloped in 2009, targeting households at about 30% of area median income and providing on-site supportive services.
The loan being amended is a $3,000,000 forgivable loan with a 25-year term issued in February 2008; it contains scheduled forgiveness beginning in year 15 at $300,000 per year until maturity in 2033 when the loan is fully forgiven, Seabright said. He said The Road Home, the current owner and developer, has informed CRA staff that it was awarded LIHTC tax credits for the new Gardens at Palmer project and that the LIHTC and voucher rules require longer minimum lease terms (six months to one year) than a weekly SRO model.
Board members heard that the existing Palmer Court configuration'largely converted hotel rooms'creates security and operational challenges and higher operating costs. The Road Home proposes constructing Gardens at Palmer on a nearby parking parcel, moving residents into the new units, then demolishing the original Palmer Court building to free space for future phases. CRA staff recommended granting the loan-modification request with additional commitments from the borrower, including priority for current residents during lease-up at Gardens at Palmer and a CRA preference for additional units in future phases to prioritize residents at risk of displacement.
Board member Petro said the amendment "is in my district" and urged support, citing safety and security problems at the current site. Danny Waltz, CRA director, confirmed the agency was not being asked for additional funds and that the annual forgiveness schedule would continue under the modified loan.
Board member Pui moved to adopt the resolution approving the amendment to the 2008 Palmer Court loan; a second was given by board member Pietro. The motion passed; the board recorded the resolution as adopted (all in favor). The board's stated record for this item noted that board members Lopez Chavez and Young were not present for the vote.
Why it matters: The amendment removes a requirement tied to a short-term SRO rental model that would have limited the use of LIHTC and voucher financing, both of which typically require longer lease terms. CRA staff and the borrower said the operational change is intended to preserve deeply affordable supportive housing while allowing necessary financing for replacement construction.
The board did not authorize additional CRA funding for the project as part of the amendment; staff described the action as a modification of loan terms to accommodate the financing plan and to preserve long-term affordability for the site.
