KING COUNTY HOUSING AUTHORITY COMPLETES $25 MILLION FINANCING TO PROVIDE FIRE/LIFE SAFETY SYSTEMS AND CRITICAL BUILDING UPGRADES FOR EIGHT PROPERTIES THAT HOUSE LOW-INCOME ELDERLY AND DISABLED RESIDENTS

Seattle - The King County Housing Authority closed on an innovative financing this week that raised $25 million for fire and life safety systems improvements, critical building upgrades and remodeled community spaces for eight public housing properties housing nearly 550 seniors and people with disabilities. This complex transaction -- involving federal tax credits, tax-exempt bonds, and public housing capital fund proceeds -- allows the housing authority to complete an initiative started in 1999 to equip its full portfolio of 22 senior/disabled buildings, located throughout King County, and in Olympia and Sedro Woolley, with up-to-date fire and life safety systems.

All 22 buildings were originally slated to be completed by 2008. However, continued federal funding cuts to public housing have slowed the pace of rehabilitation work to one-and-a- half buildings per year. Over the past seven years, KCHA has finished work on 14 of its apartment buildings. To keep from dragging out the work for another four or five years, the housing authority sought a way to accelerate completion of improvements for the remaining eight buildings.

“The safety and well-being of our senior and disabled residents and the maintenance of our housing stock to the highest possible standards is among our top priorities,” said Stephen Norman, executive director of the King County Housing Authority. “With this innovative financing, we accomplish both goals simultaneously: we’re upgrading the quality and ensuring the long-term viability of vital public assets and improving the safety and comfort of our seniors and tenants with disabilities in a reasonable time frame. This financing is good news for taxpayers, the housing inventory and people in need of low-income housing.”

The $25 million financing uses tax credits and federal capital grant funds to finance the eight-site project. Apollo Equity Partners is the tax credit investor. W.G. Clark is the construction contractor.

To raise the necessary funds for the rehabilitation of the eight buildings, the King County Housing Authority sold tax-exempt bonds that will be repaid from anticipated future capital fund grants from HUD. The bond proceeds leveraged private equity investment in return for Low-Income Housing Tax Credits. In this case, $9.5 million in capital fund bonds leveraged approximately $25 million in tax credit equity. The deal generated a 2.7 leverage factor, the highest of any such transaction in the nation.

The rehabilitation scope of repairs in each building starts with the installation of fire sprinkler and fire alarm systems, although roof, siding, deck, common area and/or parking lot improvements are included in the scope of work for individual buildings. All eight buildings are scheduled to be completed by December 2008.

KCHA administers a range of quality affordable rental and homeownership programs for residents of King County. The Authority serves more than 17,000 households daily including family, elderly and disabled households.

The eight properties included in this project are listed below.

To be completed by December 2007:

Brittany Park, 18265 First Ave. S., Normandy Park, 43 units

Paramount House, 1750 NE 145th St., Shoreline, 70 units

Riverton Terrace, 14440 41st Ave. S., Tukwila, 30 units

Gustaves Manor, 107 W. Main. St., Auburn, 35 units

To be completed by December 2008:

Mardi Gras, 24009 104th Ave. SE, Kent, 61 units

Munro Manor, 630 S.152nd St., Burien, 60 units

Plaza Seventeen, 1001 17th St. SE Auburn, 70 units

Casa Madrona, 3948 Martin Way E., Olympia, 70 units