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City converts $610,000 grant into forgivable loan to support Flats on Main affordable housing
Summary
Commission approved a $610,000 forgivable loan to Archway Partners' Flats on Main affordable housing project; staff said converting the grant to a forgivable loan avoids a taxable receipt for project income and ensures funds are used for construction.
DUNEDIN, Fla. — The commission voted Feb. 5 to approve Resolution 26‑03, converting a previously authorized $610,000 grant for an affordable housing project into a forgivable loan to the Flats on Main Street LLC.
Economic and housing development director Bob Ironsmith said the change responds to tax and financing considerations: the forgivable‑loan structure avoids an immediate taxable event for the project owner and keeps the funding directed to construction rather than administrative costs. Archway Partners’ representative Dave Hayslip explained: "If the contribution is structured as a grant, it's treated as income to the property...By structuring that as a loan which may be forgiven at the city's discretion, it's not taxable. So we can utilize the full contribution." The project is expected to provide 78 apartment units for low‑to‑moderate incomes; Hud approvals were noted as part of the closing sequence.
Commissioners approved the resolution unanimously. Staff said the loan terms mirror the previously approved $610,000 commitment, now structured to avoid taxation and ensure funds are applied to development costs.
