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KCDC awarded $11 million in tax credits for Five Points Phase 4 revitalization
Tax credits facilitate implementation of final phase of Five Points Master Plan
The Tennessee Housing Development Agency (THDA) recently announced that Knoxville’s Community Development Corporation (KCDC) has been awarded $1.1 million in annual tax credits over a 10-year period, a total of $11 million, for Five Points Phase 4, the continued development of affordable housing in the East Knoxville community.
“The revitalization of Five Points with a focus on affordable housing, community spaces and safe neighborhoods has been and remains a priority for us,” KCDC Executive Director and CEO Ben Bentley said. “These housing tax credits enable us to complete the transformation of the Five Points neighborhood.”
The Low-Income Housing Tax Credit (LIHTC) is a credit against federal income tax liability each year for 10 years for owners and investors in low-income rental housing. The credits allow KCDC to raise private equity for Phase 4, the final phase of the Five Points Master Plan. The award represents the final piece of funding needed for Five Points redevelopment and marks a major milestone for residents, the surrounding community and KCDC.
Designed by Knoxville’s BarberMcMurry Architects and Pittsburgh-based Urban Design Associates and located at the corner of McConnell Street and Kenner Avenue, Phase 4 construction is slated to begin in early 2019. It will include 82 one- to five-bedroom units within duplex, triplex and single-family homes designed to reflect the fabric of the surrounding community. Phase 4 will also include a new playground and open green space.
The process for approval of the tax credits is rigorous, and qualifying agencies must demonstrate the need for affordable housing in their communities and have a viable plan in place to build new residential units for lower-income individuals and families. This marks the fourth year in a row KCDC has been successful with its tax credit application request for the Five Points development.
“KCDC effectively demonstrated how low-income housing tax credits will enable development of affordable housing in the Five Points community,” THDA Executive Director Ralph M. Perrey said. “We have worked with KCDC on other phases of the Five Points Master Plan and are excited to see the continued progress in this neighborhood.”
In September, KCDC, city and county officials, THDA and other community stakeholders held the official ribbon-cutting for the Five Points 2 development on McConnell Avenue, a 10-building, 84-unit housing development. The Residences at Five Points on Bethel Avenue, a three-story, 90-unit housing complex for the elderly and disabled opened in July 2017. The two completed developments include new infrastructure, new sidewalks and lighting, energy-efficient construction and other features; and marks the realization of Phases 1 and 2 of the Five Points Master Plan.
Earlier this year, KCDC broke ground on the Five Points Phase 3 development, to be built on the west side of McConnell Street along Martin Luther King Jr. Avenue. Total construction cost for this phase is approximately $13 million and will be funded through a combination of low-income housing tax credits from THDA, a low-interest Community Investment Tax Credit (CITC) loan from Home Federal Bank and KCDC internal funds. The 28-building, 80-unit development is expected to be completed in the summer of 2019.
The Five Points Master Plan, led by Johnson Architecture, was developed with years of community input as a guide to replace outdated complexes with modern, energy-efficient affordable housing units. This plan builds on previous redevelopment in the area, including the adaptive reuse of the Eastport School as The Residences at Eastport, a 60-unit LIHTC project for elderly people.
Beginning in 2009, the City of Knoxville committed $800,000 annually for 10 years to the total Master Plan project for infrastructure improvements. An additional $1.55 million was committed for 2018 in the city’s annual budget and $3.48 million in 2019. These funds have been crucial for the revitalization of the Five Points development. All phases of the Five Points Master Plan will use these funds to upgrade infrastructure, add or widen existing streets and construct new sidewalks with lighting to improve walkability and connectivity of housing to the community.
“Five Points is a community with a strong history,” Bentley said. “KCDC is proud of the progress to date and looks forward to the neighborhood’s future thanks to the hard work, dedication and commitment of all of our stakeholders.”
About Knoxville’s Community Development Corporation
Since 1936, KCDC has been dedicated to enhancing the quality of life for the citizens of Knoxville and Knox County. KCDC’s mission is to improve and transform neighborhoods and communities by providing quality affordable housing, advancing development initiatives and fostering self-sufficiency. For more information, call 865-403-1100 or visit http://www.kcdc.org.