Legacy Lofts to bring 98 homes and more homeless services to Five Points
By Robert Davis
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Denver’s Department of Housing Stability (HOST) presented its plans to build a nine-story complex in Five Points that will bring to the neighborhood 98 affordable units and a recuperative care center for those experiencing homelessness.
The units are listed to serve those making between 30 and 60 percent of the city’s median income. However, with the Colorado Coalition for the Homeless (CCH) slated to serve as the building’s operator, HOST expects each unit to go to extreme-low income earners or those experiencing homelessness.
CCH established a policy to provide tiered AMI levels allowing people to graduate without being displaced and improving housing stability in case of loss of vouchers.
Known as Legacy Lofts, the property will sit at 2175 California Street and is comprised of three “condominium-ized” segments. Although it is an unusual design, it will allow the project team to fund each segment separately.
The development will be funded through a web of Low-Income Housing Tax Credits (LIHTC), grant dollars, deferred developer fees, Federal Home Loan Bank funds, and Deliveries for Denver Bond (D3) funding. HOST estimates the project will cost $19.5 million, and end with the agency carrying $4.5 million in mortgage debt.
Two residential segments are funded with both LIHTCs available: a 9 percent and a 4 percent. The 9 percent LIHTCs are reserved for new construction projects, while the 4 percent are reserved for rehabilitations. The federal government awards a certain amount of LIHTCs to state housing agencies who then use them to incentivize affordable housing development.
Developers typically sell LIHTCs to private investors to obtain working capital for the project. Investors can claim LIHTCs against their taxable income for a decade after the building is occupied, equal to either 4 percent or 9 percent of the cost of construction.
According to HOST, 64 vouchers will be provided in partnership by the Denver Housing Authority and the State Division of Housing.
The third segment of the project will be a recuperative care center to support Denver’s chronically unhoused, bringing 74 beds to the neighborhood.
HOST primarily funded the care center through proceeds from a New Markets Tax Credit, which allows private investors and corporations to claim a tax credit against their federal income tax. Denver chipped in an $800,000 Community Development Block Grant (CDBG), too.
To ensure the center operates for at least seven years, HOST is offering two consecutive service contracts to CCH. The organization is also taking on the CDBG debt in recourse, meaning CCH will owe HOST $800,000 if the center operates for less than seven years.
Megan Yonke, housing development officer with HOST, described the project as “the most complex…that I have worked on in my civil service career.”
While the project promises to deliver solutions for Denver’s unhoused, neighborhood businesses are starting to feel squeezed out. The area surrounding the California St. and 21st St. intersection is home to several homeless service providers and affordable units.
The Mercury Café, located at 2199 California St., emphatically supports Denver’s homeless community but is at risk of losing its building because of continued development during the pandemic.
“There are already three five-story buildings within a block of the Mercury providing this type of housing. This saturation concentrates poverty. Other neighborhoods need to share this kind of housing," Marilyn Megenity, who owns Mercury, said in a statement.