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Developers ask Payson for $100,000 loan to boost LIHTC score for 72-unit affordable housing project
Summary
Overland Property Group and partners asked Payson staff to work on a package of local incentives ' including a $100,000 gap loan ' to maximize the town's 20-point local-support score for a 72-unit LIHTC project at Beeline and Rumsey.
Overland Property Group and Etchell Investments presented a planned mixed-use development for about 7.5 acres at Beeline and Rumsey, asking the town to help the project earn full local-support points in the Arizona Department of Housing'awarded low-income housing tax credit (LIHTC) program.
The developers described a three-part site: roughly 5 acres for multifamily housing (72 LIHTC units at varying area median income targets plus 48 market-rate units), a 13,000-square-foot Natural Grocers grocery on the frontage, and a separate market-rate building of 48 units. "This is not a rent subsidy. This is an income restriction," said Ryan Zeth of Overland Property Group, explaining that LIHTC units remain rented by residents who meet income requirements and pay rent set according to ADOH/HUD income bands.
Why it matters: the state awards LIHTC allocations using a scoring system that includes a 20-point local-support category. Developers told the council that obtaining the full 20 points is critical for competitiveness in the balance-of-state allocation; they said Payson received one award last year but lost another application by five points.
What the developers requested: to package three town-level commitments for ADOH pre-approval: (1) a $100,000 local gap loan at 3% interest for 20 years, (2) a 10-year deferral of water fees, and (3) town sales-tax exemptions per unit previously adopted. "If we can secure those items preapproved with ADOH, we should be highly competitive this year," Zeth said.
Council questions focused on how the loan would be secured and how long the affordability would remain in place. Developers proposed a secondary lien on the property and said LIHTC projects typically include extended-use periods; they noted the affordability use period they would elect would keep the income-restricted units in place for 50 years. Zeth also offered the potential for deed-restricted market-rate units if that would help secure council support.
Council requests and next steps: council members asked the developers for an economic-impact estimate (sales-tax and job impacts tied to the grocery) and for more details on loan security and deed restrictions; staff said they would work with the developers to draft a development agreement or resolution and return with more detail. Developers said the ADOH application is due April 1 and that documentation for local-support preapproval would need to be submitted to ADOH by Feb. 28.
What the record shows: the presentation and public Q&A covered LIHTC mechanics, unit mixes, rents tied to AMI bands, the town'level points strategy, the specific $100,000 loan request, proposed security (secondary lien), and the developers' intent to remain long-term owners. No formal town action or vote was taken at the work-study; staff were asked to continue negotiations and bring a formal proposal back to council for consideration.
