Council approves loan to convert Annie Whitmire campus to affordable housing; amendment adds Heritage Fund protections

The Davenport City Council on Wednesday approved a resolution authorizing city loan financing for the redevelopment of the Annie Whitmire campus into a family housing project, with an amendment added to require Heritage Fund loans to include the same protections as federal HOME funding if HOME funding cannot be used.

The council vote followed roughly 50 minutes of staff presentations, public comment and detailed questioning by alderpersons. The amended resolution passed unanimously on the final roll call after the council first approved an amendment by an 8-2 vote.

Bruce Berger, community and economic development director, told the council the city and a developer team have pursued multiple funding sources for the project, including Low-Income Housing Tax Credits (LIHTC), HOME funds (a HUD program) and state historic tax credits. Berger said some funding delays have come into conflict with the project's timetable and the city is asking for flexibility from two different funding sources to allow closing to proceed.

Berger described procedural protections that would limit the city's exposure if the project fails to proceed. He said the Iowa Title Guarantee process, required for LIHTC projects, places multiple sources of project financing into a state-controlled escrow and releases funds as monthly draws are approved so that the city’s loan would be paid out gradually rather than in a single disbursement. He also said performance and payment bonds required by HOME funds—and to be mirrored by Heritage Fund loans if used—would help ensure vendors and subcontractors are paid or that the work is…