In the statewide field of housing projects that applied for low-income tax credits this year, just one received a negative score: 174 N. King St. in Jackson.
The other applications came from Gillette, Laramie, Casper, Sheridan and Cody. What those places have in common is ordinary construction costs, which gave them a leg up over the exorbitant dollar figures of Teton County. This is the second time the project has been rejected in favor of others from around the state.
“They made a little bit of progress, but nowhere near enough,” said John Batey, director of affordable housing development at the Wyoming Community Development Authority, the state agency that awards the credits.
In nearly every category the authority uses to rank its applicants, the 30 units of affordable housing proposed for King Street are a prime candidate for tax credits. Based on the quality and affordability of these apartments, and the desperate need for them, they scored higher than any others.
But when it comes to cost the $12 million project isn’t worthwhile from the authority’s perspective. Essentially, officials can get more bang for their tax credit bucks elsewhere in Wyoming.
Even after shaving off about $1 million from the original application, and even with a waiver for another $1 million, King Street still comes in some $3.5 million over the limit of what the authority is willing to fund.
“We’re right in the sweet spot for what it costs to do the deal in Jackson,” said Rick Ross, president of Westmount, the Connecticut-based developer. “We’re just not in the sweet spot for what it costs to do the deal statewide.”
Batey said the hard costs of the project, like labor and materials, weren’t “extraordinarily high. They’re kind of in the range of what we would expect for Teton County.
“Where things started to slip,” he added, was in soft costs like professional fees for architectural design and supervision, and construction financing. To officials at the community development authority, that suggests possible solutions.
Put simply, the project needs to be at least $3.5 million cheaper. Batey said all parties involved may need to tighten belts where they can, for example in deferring some of the developer fee and reducing fees for professional partners. Beyond that, he said local government could pitch in somehow to help cut costs.
“Everyone kind of reaching and stretching a little to fill that gap,” Batey said, “I think that’s a possibility.”
He said that some developers don’t receive the credits until their third try, or sometimes even fourth. And Scott Hoversland, executive director of the authority, said they still want to find a way to help.
“It’s definitely something that’s a big need,” he said. “We’ll work with everybody and try to close that gap and get a good project out there.”
But some are beginning to feel the tax credit process simply excludes Teton County by design.
Elected officials knew when they approved the project that the odds were long. But Mayor Pete Muldoon is beginning to feel that the authority’s standards all but ensure it would never approve a project like King Street, despite the massive housing shortage that makes living here a major hurdle for many working-class people.
“If there was not going to be a change in policy that would recognize the very different realities on the ground here, it would have been nice to know that up front,” Muldoon said. “It doesn’t seem like we ever had a chance here, and it’s unfortunate that we wasted a lot of time.”
If tax credits aren’t feasible here, he noted, Jackson Hole will have lost one of the most effective tools for funding affordable housing, in a community with few surefire strategies.
For now the project’s fate is uncertain, considering it relies on tax credits for 75 percent of the total cost. The Town Council will consider in the next couple of weeks whether to pursue other options for housing on the site.
With the project already delayed by many months of fruitless waiting, Muldoon is eager for progress.
“We need to use the property,” he said. “We can’t wait forever.”