Stuck in the weeds: Gap financing and grants are small but successful

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    (Photo by Don Kadair)

    Two of the RDA’s most successful endeavors arguably have been its gap financing and business improvement grant programs. Both are relatively small in scope, focused and effective.

    The gap financing program is intended to support new construction and rehabilitation of affordable rental and owner occupied housing by helping developers cover construction costs. Over the past few years the RDA has used its five community improvement plans to help determine where to provide gap financing.

    Take, for instance, the community plan for Zion City and Glen Oaks, which are located near the Baton Rouge Airport, Airline Highway and Interstate 110. Three years ago, the RDA provided developers in those neighborhoods with nearly $1.5 million to help build two multifamily complexes with a combined project cost of $22.5 million. Together the complexes added 200 units to the area.

    Susannah Bing, RDA director of finance and economic development, says the gap financing program is particularly successful because it is strategic in where it invests its dollars, concentrating on areas that fall within a community improvement plan and, when possible, tying them into catalyst projects funded by New Markets Tax Credits or some other RDA program.

    Similarly, the Business Improvement Grants program has helped small businesses in the RDA’s target areas clean up their storefronts and improve the appearance of their retail establishments. So far, the RDA has awarded just $365,000 or so to small businesses, but Bing says the funding is making a difference.

    “When you want to talk about leveraging properties and leveraging projects, we’re throwing every tool we have in these targeted areas,” she says. “The land bank, New Markets Tax Credits, gap financing—it’s the perfect storm.”

    Below is a list of affordable housing developments made possible with GAP financing from the RDA, and also businesses that received improvement grants.

    Gap Financing for Affordable Housing program

    Project    Hooper Springs
    Location    Zion City and Glen Oaks
    RDA gap financing    $450,000
    Project cost    $6.9 million
    Units    48

    Project    Renaissance Gateway
    Location    Melrose East
    RDA gap financing    $350,000
    Project cost    $23.4 million
    Units    206

    Project    Autumn Place/Willow Creek
    Location    Earl K. Long Hospital area
    RDA gap financing     $500,000/$500,000
    Project cost    $15.1 million/$14.8 million
    Units    84

    Project    The Elysian
    Location    Downtown/Mid City
    RDA gap financing    $841,000
    Project cost    $14.1 million
    Units    100

    Project    Wesley Chapel
    Location    Scotlandville
    RDA gap financing    $500,000
    Project cost    $11.2 million
    Units    82

    Project    Cypress Springs
    Location    Zion City and Glen Oaks
    RDA gap financing    $1 million
    Project cost    $15.6 million
    Units    144

    Project    Elm Street Apartments
    Location    Brookstown, near Prescott
    RDA gap financing    $500,000
    Project cost    $5.7 million
    Units    60

    Total RDA investment    $4.8 million
    Total project costs    $116.7 million
    Total new units    760

    Business Improvement Grants

    Choctaw Village    $120,500
    Colonial Park Shopping Center    $120,000
    J-Sale Properties    $52,500
    Ogden Park Market    $52,500
    College Barbershop    $25,000
    All in Favor     $25,000
    Istrouma Mattress    $7,500
    Renaissance Center    $7,500
    Tessier Building    $7,500

     

    Related stories:

    Five years and millions of dollars later, why doesn’t the EBR Redevelopment Authority have more to show for its efforts?

    The original mission

    The tax credits problem

    Unrealized plans

    Small but successful: Gap financing and grants