City OKs $25 million bond sale for apartments

The city of Columbus is moving forward to help a developer build more apartments on the former Golden Foundry site.

City council members last week approved an ordinance allowing the city to sell up to $25 million in economic development revenue bonds to finance construction of the 209-unit Ashford Park Apartments on the western side of the site.

The city has approved selling the bonds for Herman & Kittle Properties Inc., which plans to build two, four-story apartment buildings at 1616 10th St.

Michael Allen, serving as bond counsel, showed the council a diagram of how the bond sale would work and how the city would not have a financial risk in the project.

While the bonds are issued in the city’s name, private-sector investors who purchase them assume the financial risk if the project fails, he said.

Merchants Bank of Indiana has agreed to purchase the bonds, Allen said. With the city’s help in issuing the bonds, the developer is able to borrow money at a rate lower than what would be available on the open market.

Economic development bonding was originally intended for industrial development projects. But now the sale of economic development revenue bonds may be used to finance nonprofit, affordable or rental housing projects.

Forty percent of the Ashford Park Apartments would be set aside for low-income residents, the proposal from Herman & Kittle Properties states. The remaining units would be available at market rate.

Ashford Park will be located near the new Gateway Apartments complex, at 10th Street and Cottage Avenue, which was dedicated with a ribbon cutting in June.

The project began under the administration of former Columbus Mayor Kristen Brown.

Gateway, which has 60 two- or three-bedroom units, is fully booked with residents who met requirements to qualify for affordable housing. The complex is being administered by Thrive Alliance and was built by Jonesboro Investment Corp., which used $971,161 in state tax credits and $500,000 in state funding to help build the complex. The Gateway project was one of 15 projects to receive state tax credit funding and one of 11 to receive additional state funding in 2015.

Council members said similar bond financing was used to build the Cole Apartments in downtown Columbus. In July 2010, the Columbus city council approved issuing $2.5 million in bonds to pay for a portion of Buckingham Development’s construction of the Cole Apartments.

About Ashford Park Apartments

Where: 1616 10th St., on the former Golden Foundry property

Developer: Herman & Kittle Properties, Indianapolis

About the apartments: Herman & Kittle is proposing to build two, four-story apartment buildings which include affordable and market-rate apartments, with 40 percent of the units set aside for low-income applicants. The 209-unit complex would be on the western side of the former Golden Foundry site.

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Julie McClure is assistant managing editor of The Republic. She can be reached at jmcclure@therepublic.com or (812) 379-5631.