Developers aim to have a King Street housing project underway by spring, but they must first figure out whether the current plans for the property are legal.
When town officials granted the project to the Jackson Hole Community Housing Trust in September, one condition of their agreement was that the town would retain ownership over the property. But it’s unclear whether Wyoming law allows that.
More specifically, the plan was for the Housing Trust to develop the condos and sell them under a long-term ground lease while the town remained the owner of the property.
That would allow officials to redevelop in the future and to ensure the deed restrictions — which will designate the units for local workers — remain intact.
But a complication arose when the Housing Trust realized it may not be legal in Wyoming to sell condos under a ground lease, as opposed to giving buyers absolute ownership of the property.
Now, before they proceed, housing officials and the Housing Trust must investigate further to determine whether they can secure financing for the project as it stands. They are consulting Fannie Mae — the Federal National Mortgage Association — as well as local banks and title companies.
“We need all parties to be comfortable with the legal structure,” said Anne Cresswell, executive director of the Housing Trust. If even one party isn’t, she said, the current terms will be impossible.
At a recent meeting, the Town Council made provisions for that possibility. Councilors still hope to retain ownership of the property, but they voted to allow town staff to consider a backup plan that would involve transferring ownership.
Cresswell said she expects to have more clarity by the next council meeting set for Dec. 2. She said the Housing Trust has always used ground leases in the past, and she would prefer to continue the practice.
“I assure you,” she told the councilors, “nothing would make me happier than if we could have replicated the wheel going forward on this project.”
Things have never been simple for the King Street housing project. Before the Housing Trust took over, the project was in the hands of Westmount Development, of Connecticut, which tried twice to secure low-income tax credits to create 30 units for Teton County’s lowest income earners.
But Teton County’s high construction costs made it difficult to win over the Wyoming Community Development Authority, which awards the credits.
In nearly every category the state authority uses to rank applicants, Westmount Development proved a prime candidate for tax credits. Based on the quality and affordability of the apartments, and the desperate need for them, they scored higher than any others.
But when it came to the cost, the $12 million project wasn’t worthwhile from the authority’s perspective. Officials felt they could get more bang for their tax-credit bucks elsewhere in Wyoming.
Even after shaving about $1 million off the original application, and even with a waiver for another $1 million, Westmount still came in some $3.5 million over the limit of what the state authority was willing to fund.
Fearing that a third attempt for tax credits would be unsuccessful as well, and further delay construction, the Town Council re-awarded the King Street project to the Housing Trust.
The Housing Trust’s proposal is identical to one it submitted in 2018, when the town passed it over in favor of Westmount.
The Housing Trust plan calls for 24 ownership units tailored to a mix of incomes ranging from 80% to 120% of the county average.
Cresswell said she still hopes to break ground in the spring, in which case the homes would open by fall 2021.