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Tucson's 63-unit Oracle Rd housing project gets $2M in tax credits
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Tucson's 63-unit Oracle Rd housing project gets $2M in tax credits

  • The Oracle Choice Neighborhood south of West Miracle Mile
    matsubatsu/FlickrThe Oracle Choice Neighborhood south of West Miracle Mile

The city of Tucson was awarded $2.1M in Low-income Housing Tax Credits to bring in private developers for a 63-unit affordable housing project on Oracle Road and Miracle Mile, Mayor Regina Romero announced Friday.

The city and for-profit developer Gorman and Company are partnering on the project at Oracle Road and Miracle Mile, supported by $2.1 million in Low-income Housing Tax Credits.

The Arizona Department of Housing awarded the funds to leverage bringing in a private developer for the $19.8 million subdivision project known as Milagro on Oracle. The project includes rehabilitating two motor courts at the No Tel Motel and an adjoining property to create to create 15 new affordable housing units. The credits will reduce the taxes and risk for the private partner in the project.

Another 48 units will be opened in a newly built, four-story building to create 63 total apartments. The project will be built on city-owned land in the Miracle Mile Historic District, and will be the first built with the help of El Pueblo, a nonprofit housing development arm of the city, partnering with Gorman.

"The nearly $2.1M tax credit is a significant incentive for developers who want to work with the city but need relief to reduce their liabilities in a market where building costs are increasing at every stage of a project," Romero said in a public statement.

Based on a previous LIHTC projects, the construction is expected to start by next summer, in either late June or in July, but the timeline is still unclear, city officials said.

Romero and the City Council are “aggressively expanding our efforts to preserve and enhance existing housing,” the mayor said in a statement, and “subsidizing rehabilitation projects for affordable rental housing is one way we are seeing success,” she said.

Indirect federal tax incentives from LIHTC are key to attracting for-profit developers, who are better at building units than the government, city officials have said. It's the largest source of financing for low-income housing, according to the U.S. Department of Housing and Urban Development. The city has offered waivers to help for-profit developers qualify for the tax credits in hopes of quick development on other projects, such as in Menlo Park.

Two of the motor courts included in the project will keep some of their exterior features to ensure their preservation as part of the Miracle Mile Historic District.

The Miracle Mile Historic District is an L-shaped corridor on the National Register of Historic Places, running along North Stone Avenue, Drachman Street, Oracle Road and Miracle Mile near Downtown Tucson. It represents an area that was heavily influenced by the northern segments of U.S. Route 80, U.S. Route 89 and Arizona Route 84 and includes clusters of mid-century motels.

The new units are meant to house older adults, with 19 units set aside for people 55 or older who don’t have places to live. Milagro on Oracle was planned with elderly adults in mind, Liz Morales, Tucson’s housing and community development director, said.

"This project is important to us serving vulnerable populations," Morales said in a public statement. "Especially very low income, older adults who have been greatly impacted by the housing crisis, including those who become homeless in their golden years."

State Housing Director Tom Simplot praised Tucson’s “reputation for creativity" when it comes to building affordable units, saying the Milagro on Oracle project “reflects that creativity while at the same time providing much needed affordable housing.”

The LIHTC award, Romero said, particularly shines a good light on the city’s master plan for building affordable housing, which is called the Housing Affordability Strategy for Tucson, or HAST. In a public statement, the mayor said that “this award shows how well our HAST is working.”

Bennito L. Kelty is TucsonSentinel.com’s IDEA reporter, focusing on Inclusion, Diversity, Equity and Access stories, and a Report for America corps member supported by readers like you.

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