By BOB OLIVER
DEARBORN — Artspace last week cleared it’s largest remaining hurdle before its city hall artist community development becomes a reality.
Artspace Nov. 5 was granted a conditional award of low income tax credits from the Michigan State Housing Development Authority, conditional that the group submits final paperwork to the state by Nov. 22.
Artspace, a Minneapolis-based nonprofit real estate developer, purchased the city hall complex in July and plans to renovate it to create 46 work and living spaces for artists as well as spaces for art studios, art organizations and creative businesses. They have many similar properties throughout the country, but this would be their first in Michigan.
Property Development Project Manager Becky Carlson St. Clair said the documents requested are just a list of clarifications that MSHDA needs for its records and that Artspace is already putting them together.
“Not all of the items MSHDA have requested were things that were necessarily asked for at the time of our application, but that are needed now that we have been approved,” St. Clair said. “We typically get a list like this prior to receiving the tax credits, so this was just an instance where they rewarded the credits and then asked for the clarifications afterwards.”
Artspace will be awarded credits up to $792,101 annually for 10 years, which it can sell for equity that will be used to pay for the construction costs of the project, which is roughly $15.7 million, though only $10.5 million of that total cost is eligible to be done with tax credit money.
Over the 10 years that Artspace will receive credits from the award, it will sell them for approximately $7.4 million in equity.
The tax credit money could only be used for items attributable to the construction as approved by MSHDA, such as converting the rooms into apartments. Other repairs needed at the complex would have to be paid for by Artspace or through donations from outside sponsors.
One such source of income will be historic tax credits, which are expected to provide $2.4 million to Artspace. The city hall complex, built in 1922, was designated a historic site by the state Friday.
St. Clair said tax credits are very important to all Artspace projects.
“We would not be able to do our projects without these sources of equity,” St. Clair said. “We depend on them and they are a main source of funding.”
Artspace has 33 sites in 13 states. There are also 12 other projects in development besides the one in Dearborn.
Heidi Kurtze, Artspace vice president of Property Development and the leader of the project here, said there is a lot of excitement in the company knowing that it has been approved for the credits in Dearborn.
Renovations to the city hall complex are expected to take 12 to 15 months and are expected to begin next summer.
(Bob Oliver can be reached at [email protected])