Ponderosa Ownership Entity in partnership with the Foundation for Affordable Housing are proposing to acquire and rehabilitate Ponderosa Acres Apartments, a low income multi-family rental housing complex located at 1301 Industrial Ave, Billings, MT. Ponderosa Acres Apartments is a 120-unit family project, originally built in 1972 that received moderate improvements in 1997.  The Project currently operates under a 100% Section-8 U.S. Department of Housing and Urban Development (HUD), Housing Assistance Payment (HAP) contract.  The project is laid out over 10 acres, and consists of 15 residential buildings housing studios, ones, twos and three bedroom units, there is also a standalone amenity building for the leasing office, business center and clubhouse.  The buildings are two-story garden style and units are currently equipped with AC, an oven, refrigerator, garbage disposal and dishwashers in select 3 bedroom units.  Additional site amenities include a playground and laundry facilities.

The project is not a previous Low Income Housing Tax Credit (LIHTC) deal and is only encumbered with HUD restrictions under the HUD Section 8 HAP contact.  The Redevelopment Plan contemplates an application submittal in December to the State for Bonds and Tax Credit financing, a January bridge closing to acquire the property, and a tax credit/bond closing sometime at the end of March 2020.  The current HUD Section 8 HAP contract will be transferred and renewed for an additional 20 years and the affordability of the project will be maintained for a minimum of 30 years under the new Low Income Housing Tax Credit Regulatory Agreement that will encumber the property.
The rehabilitation plan for the successful revitalization of the property addresses deferred maintenance, capital improvements, site upgrades, security infrastructure and community center enhancements.  Total per unit construction related expenditures are more than $53k per unit.  A significant portion of the Redevelopment activities will focus on system upgrades and improvements designed to increase energy efficiency and reduce maintenance expenditures and operate the property as an energy enhanced community.  These items include the replacement of central air conditioning in the three-bedroom units, new energy efficient appliances, and new windows.  Exterior improvements will also include full paint, stair replacement, significant concrete work to address ADA path of travel and landscape upgrades.  

There will also be a large focus of the redevelopment plan to enhance the quality of life for residents through new and improved community amenities and in-home improvements that make the homes more usable and enjoyable.  Units will be fully upgraded with new kitchen and bath cabinetry, countertops, flooring, energy efficient appliances and lighting.  The rehabilitation will also address accessibility and will modify 6 units to be fully ADA compliant.  The new community amenities include converting the existing community room into a media room and library.  In addition, wi-fi will be provided free of charge to the residents and the existing basketball court will be enhanced.  

This project anticipates applying for a real estate property tax exemption. Notice of the public hearing was posted in the Yellowstone County News on January 3 and January 10, 2020. 

City Council will conduct a public hearing, there are no viable alternatives.

There is no direct financial impact from this public hearing. The Montana Department of Revenue may grant a property tax exemption, but the project will pay all City fees and assessments.

Staff recommends that the City Council conduct a public hearing on the need for low income multi-family housing at this location.