The businessmen behind the Lincoln Building project have come up with an alternative plan to develop the Public Square landmark: rehabilitate the upper floors into affordable rental units.
Developers Brian H. Murray and Mark S. Purcell have decided to forgo a small-business incubator, office space and possible art studio on the upper four floors because of the difficulty of obtaining funding for those uses.
If they switch to affordable housing, the developers would be able to apply for housing tax credits to help finance the $12.1 million project. That funding would not be available if they continue with commercial space, the members of the Watertown Local Development Corp. board learned Thursday morning.
This is a way to get more financing and make it a successful project, Mr. Murray said Thursday.
He was joined at Thursdays meeting by Neighbors of Watertown Executive Director Gary C. Beasley and Christina J. Schneider, chief financial officer for Purcell Construction, to discuss the changes with the WLDC, also known as the Watertown Trust.
Mr. Beasley outlined the changes and preliminary figures on how much it would cost to complete the project and how it might be financed.
In another change, Neighbors and the WLDC are coming on board to collaborate on the rehabilitation project. Mr. Murray told the WLDC board that Neighborss long history in rehabilitating old buildings into rental housing will help as the group continues to work on the project.
The 55,300-square-foot building now would include 36 units, double the number that had been proposed for the top two floors. The developers also have dropped plans for market-rate apartments, realizing that Watertown cannot sustain them and that it would be best, instead, to offer affordable housing, Mr. Beasley said.
Im pretty confident its a viable project, Mr. Beasley said. But we have to do some due diligence.
With the switch to all apartments on the upper floors, Mayor Jeffrey E. Graham asked whether the city could handle more apartments, since the Mercy and Woolworth Building projects now underway will offer 218 affordable units when they are completed.
Mr. Murray said theres still a need for apartments for middle-income people that go for as much as $1,000 a month, but not for market-rate rental housing that could cost $1,500 or more.
Until now, plans for the Lincoln Building also called for a business incubator on the second floor, along with office and commercial spaces in the five-story building. The project continues to include first-floor storefronts along Public Square and other commercial spaces on the J.B. Wise parking lot side.
The green-energy components of the project a rainwater harvesting and reuse system and solar panels on the roof also have been scrapped.
On Thursday, Watertown Trust members agreed to commit $20,000 to the projects out-of-pocket predevelopment costs. The developers also will ask Watertown Trust to approve a 20-year, $250,000 loan to help finance the project. The Development Authority of the North Country already has committed a loan for that amount, Mr. Beasley said.
At this point, the project has a $550,000 budget gap, but Neighbors is looking at different funding sources. Mr. Beasley also said he expects the project will receive state funding.
If all goes well, the developers will apply for housing tax credits in May or June and should hear this fall whether they will be granted. Construction would start next spring and take about a year to complete.