The Elgin Housing Authority expects to receive $7.5 million from a new federal housing program to rehab its property on State Street, and possibly build another building next door.
The U.S. Department of Housing and Urban Development announced recently the launching of the Rental Assistance Demonstration program, selecting 68 public housing authorities throughout the county as participants.
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The Housing Authority of Lake County and the Housing Authority of Christian County were also among those named.
EHA Executive Director Damon Duncan said the agency plans to use the $7.5 million to rehab Central Park Towers, an 11-story, 150-unit building at 120 S. State St.
The agency wants to use the funds as collateral to obtain housing loans for a $25 million project to turn most of the building's 99 efficiencies into one-bedrooms, and build a new six- to eight-story mid-rise building next door.
"Twenty-five million (dollars) is going to go a long way in terms of stimulating the local economy," Duncan said.
The new building would be built on a property next to Central Park Towers that the EHA recently bought, Duncan said. The property currently holds an old mansion rented out as apartments; the mansion would be knocked down to build the new mid-rise, along with additional parking, he said.
However, the EHA will need to get another $15 to $18 million in low-income housing tax credits from the Illinois Housing Development Authority, Duncan said.
Central Park Towers is operated as an annual contribution contract project, where residents pay 30 percent of their income while HUD covers the rest, Duncan said. However, that doesn't allow for extra funding for capital improvements, even those simply related to wear and tear, he said.
The EHA expects to hear by the end of January whether the initial plan submitted to the IHDA is a viable one, Duncan said. If it is, the EHA will submit an official application for low-income housing tax credits in March. If not, the goal will be to do that during the next round of applications in June, Duncan said.
In the end, if the EHA doesn't get the additional money, it will use the $7.5 million in federal funds to simply rehab the current efficiencies without expanding, he said.
"It is a huge deal," Duncan said. "We definitely want to be in a position to provide the community with quality housing, not just by today's standards but by future standards."