The Ridge at Clear Creek--a new 360-unit apartment complex in 21 buildings near NAU--aims to address the need for more affordable housing in Flagstaff:
A crew works near the three jacuzzis on the construction site of the Ridge at Clear Creek Friday afternoon.
The apartment complex will have 360 units, including some set aside for affordable housing.
(photo: Jake Bacon)
Good jobs, affordable rents
by JOE FERGUSON
Arizona Daily Sun
May 16, 2010
One of the largest construction projects in northern Arizona is largely going unnoticed, despite employing hundreds of construction workers and pouring millions of dollars into the local economy. The 360-unit apartment complex known as The Ridge at Clear Creek is just off Lone Tree Road in Flagstaff, adjacent to the Rio Homes subdivision. But hidden behind the rolling hills each day are up to 200 workers from roughly a dozen different construction companies putting up the first three buildings of a 21-building project.
The development is expected to address a critical shortage of rental units that are considered affordable. In a a complicated agreement between the city and the developer of the project,
locally owned Consolidated Investment Co., will make 61 of the apartments affordable to the those earning up to 80 percent of the area median income through lowered rents. Currently, 80 percent of the median for a family of four would be $48,700. In exchange for the affordable units, the city has agreed to several concessions, including expedited permit processing and the easing of city requirements for parking and landscaping.
LOW-INTEREST LOAN
The deal also helped Consolidated secure a loan from the U.S. Department of Housing and Urban Development to fund the $35 million apartment complex. The government-backed HUD loan came with interest rates below what would be commercially available for a project this size. In return, the 61 units must remain low-income housing for the next 50 years. But the managing member of The Ridge at Clear Creek LLC said she believes the units will essentially be permanently affordable. Karen Nackard said the affordable units (which will be identical to the market-rate units) provide a dependable revenue source as the units are unlikely to be vacant for very long. She said it makes sound business sense to continue to make the units "affordable" even past the life of the agreement with the city.
As part of the development agreement with the city, Consolidated Investment also agreed to never convert the apartments into condos. In 2006, the city saw three large apartment complexes converted into condos.
For many in Flagstaff, renting is the only housing option. According to recent sales figures from the Northern Arizona Association of Realtors, the median price of a single-family detached house is approximately $270,000 -- half sell for more, half less. With 10 percent down and a 30-year mortgage at 6 percent, that translates into a $1,500 monthly payment. A family of four making roughly $49,000 and spending a third of their income on housing could afford no more than $1,300 a month.
RENTS BETWEEN $800 AND $1,100
Pricing for the affordable units was not immediately available from the developer, but the city of Flagstaff says it expects the one to three-bedroom apartments to be priced between $800 and $1,100. Those interested in applying for the first 11 affordable units when the first three buildings become available in August to rent will deal directly with the apartment complex, not an outside agency like the Flagstaff Housing Authority. In addition to the 11 affordable apartments, 43 market-rate units will be available to rent when the complex partially opens this fall.
Nackard also believes the new market-rate units will be popular with college students. She points to the neighboring Clear Creek Village apartment complex, which Consolidated Investments also owns. There is currently a waiting list, primarily NAU students, who walk along Pine Knoll and cross Lone Tree to get to the university's campus. A clubhouse at The Ridge at Clear Creek is expected to offer students various amenities, including racquetball courts, an exercise room, a computer room, tie ins to the Flagstaff Urban Trail System and an area set aside to play Frisbee golf. But working with the federal government comes with some strings attached, which Nackard says means a return on investment is many years away. The company is required to hold a percentage of cash in a bank account in order to replace fixtures, carpeting and furnishings as they break over time. "The cash profit is way in the future because the government requires so much to be held in reserve," Nackard said.
LABOR MOSTLY LOCAL
A representative with general contractor Weeps Construction said that 83 percent of the labor pool is from northern Arizona, with most of the subcontractors from Flagstaff. Tyler Mark, the project manager for Wescap, said established relationships helped to keep most of the labor pool local, noting the firm has worked with many of the companies on other local projects, including homes in Pine Canyon and the Marriott Courtyard Hotel in west Flagstaff. He said the insistence on using as many local contractors as possible came from the owner of Consolidated Investment, George Nackard.
Mark tried to recruit as many local companies as possible for the $35 million project. But when he needed to order hundred of cabinets, it made more sense to use a specific vendor who not only installs the cabinets, but also makes them. "I bid it out to a local cabinet company and there was just no way. They have never made those type cabinets before - they were going to have to buy if from wherever and then put them together," he said. He said the 17 percent of non-local construction were primarily businesses like the cabinet company that were geared toward multi-housing developments.