An ongoing feasibility study for creation of market housing in downtown Altoona has shown there's a "funding gap" between amounts needed to renovate old buildings and rent owners could charge to make the ventures profitable, according to Patrick Miller, CEO of the Greater Altoona Economic Development Corp.
The Pittsburgh-based consulting team hired with Act 47 funding is "absolutely convinced that demand is there," said Dave Duncan, a member of the GAEDC board at a recent meeting.
But to close the funding gap, it may take owners willing to invest their own muscle power, banks that can see the value of investing in the projects and agencies willing to lend or grant funds, according to Miller.
How the community "rallies around" the projects will determine what gets done, he said.
The consulting team plans to make a presentation of its findings Wednesday at a City Council meeting.
Owners should be able to charge between $750 and $1,000 a month, he said.
But remodeling those old buildings to create well-appointed, high-end housing will be costly, making debt repayment schedules challenging, according to Miller.
"Is it cost prohibitive?" he asked. "We don't know yet."
Local officials questioned the initial rehab cost findings of the consultants, who reviewed the numbers and reduced them only slightly, Miller said.
One promising model for what could happen downtown is Legacy Suites, an apartment complex created in the former Lakemont Elementary School, using debt and "a ton of sweat equity," Miller said.
One bedroom apartments there are renting for $850, and two-bedrooms are renting for $1,100, he said.
Unfortunately, not all the downtown buildings are in as good a shape as the school in Lakemont was, and many would not be as easy to convert into apartments, either, said Lee Slusser, city planning director.
Ultimately it will be up to individual property owners, Miller said.
Those who are not ready might be willing to sell to others who are, Duncan said.
Housing may not be feasible for some of the larger buildings, which may be better suited for office space, Miller said.
The state's Redevelopment Assistance Capital Program could be a source of funds, suggested GAEDC member Dwight Knouse.
RACP money can go for residential development if a project is critical to a community's strategic development plan, Miller said.
Projects also need to be placed in the state's capital budget previously, he said.
It's easy to get projects listed on the capital budget, but getting them funded doesn't necessarily follow, said GAEDC member Bruce Kelley, who was aide to former state Sen. Bob Jubelirer.
When Jubelirer was in office, along with state Rep. Rick Geist and U.S. Rep. Bud Shuster, grants flowed freely to this area, but [now] theres a little bit of shift in philosophy, Miller said.
The political stars arent aligned like they use to be, he said. The whole system is changed.
Theres more emphasis now on ensuring that grants are for projects that create jobs and theres private investment to match, he said.
Theyve tried to take some of the politics out, he said.
Still, legislative support from the citys Act 47 coordinator might help free grants for such development, Miller said.
They never will take [all] the politics out, Miller said.
It might help if owners can create co-dependent projects that would allow for flexibility for matches, with the values of building providing such matches, officials said.
Use of that kind of grant money, however, would trigger a requirement for payment of prevailing wages, which increases construction costs by 25 percent, Miller said.
The good news is theres more of a market for residential units than many thought, Slusser said. But the buildings [themselves] are more of a challenge.