Home Inverness colorado Local Developers Carry On Despite Construction Obstacles | New

Local Developers Carry On Despite Construction Obstacles | New


OIn the coming weeks, Darsey Nicklasson hopes to achieve a goal she’s been working towards for two years: moving the first residents to Mosaica, her apartment project in southeast Colorado Springs.

It was a long and difficult process.

“We are finally getting closer,” she said. “It’s like we just dragged our way through it all.”

Nicklasson, founder and president of Places Management, has a waiting list for families who want to move into the 15 apartments in the first three Mosaica buildings, but has not yet started accepting applications.

“Once we do that, and we commit to someone having an apartment by a certain date, and that gets pushed back, it puts all of us in a tough spot,” she said.

This statement – and the accompanying weary sigh – reflects the delays and obstacles that Nicklasson faced for many months: huge increases in construction and material costs – 30-50% across the board; labor shortages – and “those who come to work may only have one or two years of experience, which makes the job more difficult”; repeated delays in the delivery of materials such as concrete; and an increase in interest rates on its financing — “we started with 3 ½%; now we are at 6 percent.

“I love what I do,” she said, “and I love my industry, but it’s wearing us down.”

The same delays and obstacles have plagued projects funded by social housing tax credits, and it is only through perseverance and creativity that they are moving forward.

Lower rents

Nicklasson is an innovator who launched an apartment renaissance in downtown Colorado Springs with her first-ever project – Blue Dot Place – and followed it up with the equally successful Casa Mundi.

These buildings were small, elite and designed to appeal to young, affluent tenants who wanted an urban lifestyle.

Mosaica, at 2155 Hancock Expressway, was a different project from the start. Its 223 units were designed as a neighborhood for middle-income working families, a mosaic that reflects the diversity of the community.

A second project in southeast Colorado Springs, the 150-unit Kaleidos on Murray Boulevard and Pulsar Drive, also aims to provide quality, accessible housing for the workforce. Kaleidos sits on 9.5 acres that once housed Atlas Preparatory School; it will consist of 30 five-unit buildings with similar amenities.

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Affordable housing projects are difficult to develop currently due to rising labor and construction costs.

Nicklasson assembled a group of investors to purchase the 20-acre property on which Mosaica sits. The plans included 48 buildings with no more than five apartments each and a mix of sizes ranging from studios to three-bedroom units. Several four-bedroom units are planned to accommodate multigenerational families.

Walkways wind past the porches; common areas function as backyards where children can play. A neighborhood center and playground anchor the community.

Nicklasson’s intention was to keep rents as low as possible – she initially envisioned around $1,500 per month on average.

Rents have yet to be set, but based on his early projections, Nicklasson said: “We’re probably looking at increases of 45% because that’s what the cost increases have been.” Interest rates alone will increase costs by $300,000 to $400,000.

“We are moving forward because our community needs housing,” she said. “If we stop, and there is even less supply on the market, it just makes things worse and worse.

“We’re already in the stages with Mosaica where we’re all building, and we’re fully funded on Kaleidos,” she said. “We will continue to do our best for the community in terms of rents. We will always create a great neighborhood to live in and contribute to the South East in many other ways by being a local owner and local management company.

The project includes a commercial component along the Hancock Freeway which will be an opportunity for local businesses.

“We don’t know what it will be,” Nicklasson said. “The only thing I’ve made a commitment to the community is that we won’t be opening fast food restaurants.”

Nicklasson decided to finance his projects through conventional investors rather than using social housing tax credits.

“It’s a completely different business plan,” she said. “I have no experience in this type of project. They are complicated and take years to complete, adding years to what we are already experiencing. So, when we set up the project, I didn’t feel capable of undertaking something very vast and new like that.

Affordable projects

Other projects in southeast Colorado Springs are funded by state and federal low-income tax credits.

While affordable housing projects are underway throughout the city, the Southeast is the busiest area for affordable housing construction, said Katie Sunderlin, senior affordable housing coordinator for the City of Colorado Springs.

Projects representing nearly 1,000 homes are under construction, have received tax credits or have applied for tax credits in the Southeast, she said.

Earth was laid in late April on the four-story, 77-unit village at Solid Rock, a project that stems from the generosity of the Solid Rock Christian Center. The church formed the Solid Rock Community Development Corp. and partnered with Commonwealth Development on the project.

Pastor Ben Anderson, the church’s senior pastor and executive director of the development corporation, said preparatory work was underway at the site.

The development will house renters earning between 30 and 60 percent of the region’s median income in one-, two-, and three-bedroom units.

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Greccio Housing will manage the development, which is expected to be completed in summer 2023.

DBG Properties of Portland, Oregon opened Academy Heights Apartments at 1350 Inverness Drive in March 2021.

DBG secured a $22 million Freddie Mac loan for the project and received funding from the El Paso County Housing Authority and the Colorado Investment Fund.

The additional funding included 4% low-income housing tax credits, which restrict property rents for renters to 30, 60 and 70% of the region’s median income.

The project, which will consist of three four-story buildings with one-, two-, and three-bedroom units, is expected to be completed in March 2023.

Construction is set to begin this fall on Paloma Gardens, a 75-unit low-income senior housing project on the site of the former Laurel Manor Care Center at 920 S. Chelton Road by the Virginia-based Volunteers of America National Services.

The organization already operates the 50 Laurel Gardens apartments, which will be renovated and will become part of Paloma Gardens.

Tax credits were also granted for a 50-unit development by Silver Key Senior Services at 1575 S. Murray Blvd.; and for Panorama Heights, a 133-unit development by Kansas-based Cohen-Esrey Development Group, Overland Park.

GPR Partners, consisting of Greccio Housing, Partners in Housing and Rocky Mountain Community Land Trust, applied for tax credits to rehabilitate 24 units and build 168 additional units at Bentley Commons on 7 acres off the Hancock Freeway near Blvd. Astrozone.

Construction on Draper Commons, an affordable 280-unit multifamily project in two buildings on a 6.44-acre site at East Fountain Boulevard and South Wahsatch Avenue, is also set to begin this fall.

Developer Toby Gannett, president of BCR Management, plans to build 14 studios; 210 one-bedroom, one-bathroom units; and 56 two-bedroom, one-bathroom units that will be rented to families with incomes between 30 and 70 percent of the region’s median.

Creative financing

One of Patke’s main concerns in the Southeast “is to generate more affordable housing without being cataloged as the community’s affordable housing zone. And the Southeast needs economic opportunity at the same time it needs more housing options.

What’s also needed, he said, is “the creativity and investment of people who have resources that maybe don’t have to depend on the housing tax credits for the disabled. low income to get these things done.”

Developers can apply for rebates on various development charges, including Colorado Springs land use review, planning, public works, and utility charges.

“Affordable housing projects are experiencing huge shortfalls due to rising construction and labor costs, and interest rates,” Sunderlin said. “Being able to pay back a few hundred thousand dollars at the end of a project fills a huge need right now.”