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

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


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