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TAX-EXEMPT BONDS SOUGHT FOR SENIOR HOUSING

Mayor Kenneth D. Swan plans to ask the Common Council for its opinion on a proposal to back a senior-citizen housing project with tax-exempt bonds.

The Niagara County Industrial Development Agency is expected to accept an application next week from Burke Bros. Construction Inc. of Hamburg for assistance with a $5.6 million plan to build 80 one- and two-bedroom cottages on Elmwood Avenue.

A public hearing would have to be held before the IDA board votes on the project. The hearing date is not yet set; the earliest the IDA board could act is Oct. 21.

IDA Executive Director John R. Simon said the city's opinion counts.

"I've been very adamant that if the elected leaders in a jurisdiction oppose a project, I would not recommend it," Simon said.

Swan said Simon called him and asked for a letter offering a viewpoint on the Burke proposal. The mayor said he asked whether the project was any different from the one Burke brought before the Council in February, but the IDA didn't know because it wasn't involved then.

Said Swan: "I informed him I would have to see the application . . . so I can review it along with the Council." Swan said he would not write any letters of support for the project unless the Council gives him the go-ahead. The earliest the Council could discuss the issue is Wednesday.

Rocco R. Termini, Burke's vice president for development, said the project hasn't changed, just the financing.

The company has a contract to buy 21 acres of privately owned land near the corner of Elmwood Avenue and South Street. Its eventual $10 million project includes 40 condominium units and 14 single-family homes, in addition to the 80 cottages.

The land is already zoned residential, and preliminary site-plan approval was granted earlier this year by the city Planning Board. Termini said final site plan approval would be the last hoop the project would have to jump through. He said the matter might be on the Planning Board's agenda either Oct. 4 or Nov. 1.

The 80 units in the first phase would be tax-exempt because the general partner in the project would be American Shelter Inc., a housing company owned by the Old Landmark Church of God in Christ, headquartered in Memphis, Tenn. Churches are exempt from property taxes.

Termini said a payment in lieu of taxes agreement would be part of the bonding package through the IDA.

Burke is seeking authorization from the IDA to issue and sell up to $4.5 million in "private activity bonds," although Termini said the full amount might not be sold. He said the minimum amount needed would be $3 million.

The interest on those bonds would be tax-exempt for the investors, and the bonds would be debt of Burke Bros., not the IDA.

Simon said the purpose of the bond-financing package is to enable Burke Bros. to apply for $2 million worth of federal income-tax credits.

Burke Bros. is also applying for $400,000 worth of direct funding from the Federal Home Loan Bank.

The rents on the cottages would thus be subsidized by the state and federal governments, and would range from $215 to $275 per month.

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