CDA: Beloit Road Senior Apartments had a clean audit but staff flags complex exit, valuation and affordability choices

Staff presented the annual Baker Tilly audit for Beloit Road Senior Apartments and said auditors found no reportable findings. At the same time, staff warned the property is operating at a technical loss once debt service is included because the city holds loans on the asset.

"Overall, it was a clean audit," the staff member said, while outlining the more complicated financial picture: a broker valuation in the discussion yielded figures around $5.2–$5.4 million and staff described roughly $5.6 million in outstanding debt across multiple city loans. Staff explained the tax-credit investor will likely exit at the end of December, at which point the CDA could become the sole LLC member, and that the project-based voucher agreement also expires at year-end and must be updated.

Board members probed the CDA’s responsibility to ensure continued affordability for seniors at the 103-unit property, raising deed restrictions, buyer screening and the possibility of new construction as policy responses. Staff noted WHEDA/LIHTC affordability requirements run 15 years and that imposing additional deed restrictions would reduce market value and complicate sale prospects. The board also discussed physical challenges at the 1940s-era site — stairs, no elevators and extensive maintenance needs — that affect long-term management and whether the CDA would hold the property temporarily if it is reacquired.

Staff summarized next steps: Baker Tilly will continue consulting on exit strategies and the CDA will coordinate with finance and legal staff to avoid service disruption for residents while pursuing a disposition path and investigating options including deed restrictions, targeted buyer screening, or pursuing replacement housing through new development.