The Idaho Falls Redevelopment Agency will enter into an exclusive negotiation agreement with Boise-based The Housing Company to redevelop, as affordable housing, the 80-year-old, five-story Bonneville Hotel building that has been beyond its prime since the 1960s.
The IFRdA Board on Aug. 25 selected The Housing Company from three proposals that also included Boise-based Thomas Development and Widmyer Corp. in Coeur d’Alene.
“It was a very, very difficult decision,” IFRdA Chair Lee Radford said. “It came down to the money.”
The Housing Company’s proposal will cost the agency $440,000, while Thomas Development’s proposal asked IFRdA for $1.4 million, Radford said.
Radford said the Widmyer proposal called for market funding rather than tapping low income and historic tax credits that would inject more money into the local economy.
He characterized the Thomas proposal as “more certain, more expensive” and The Housing Company’s as “less certain, less expensive.” But he hedged this with the high success rate The Housing Company has had in winning competitive 9 percent low-income housing tax credit (LIHTC), the source of the uncertainty.
The Housing Company will compete for an LIHTC in February.
“The 9 percent tax credits are very, very competitive,” The Housing Company Director Douglas Peterson said. “We have been extremely successful at obtaining 9 percent tax credits.”
The Housing Company seeks a $6.8 million tax credit payable over 10 years for the projected $10.9 million project. It will also seek a $1.6 million historic tax credit, a $650,000 conventional bank loan and The Housing Company will use $45,000 in its own funds.
The negotiations with IFRdA will involve the $440,000 in agency funding that could come in the form of cash and/or a variety of in-kind services such as building permit or utility fee reductions, Peterson said. He also anticipates $50,000 in city funding for sidewalk and utility improvements.
The Housing Company is partnering with the Pocatello firm Myers Anderson Architects and Bateman-Hall General Contractors of Idaho Falls, the largest general contractor in eastern Idaho. Myers Anderson has designed several historic renovations, including the Wilson Theater in Rupert, the Lyman Barn near Rexburg, and the Strand Theater and the Roundhouse, both in Evanston, Wyo., where Myers Anderson has a second office.
Myers Anderson has its main office in the historic Whitman Hotel building, which The Housing Company also renovated.
IFRdA has an option to buy the Bonneville Hotel and pass the ownership on to The Housing Company through the development agreement.
The Bonneville Hotel had 74 rooms. Today it includes 63 apartments, two commercial spaces/apartments and a vacant ground-floor restaurant/bar.
The Housing Company intends to remove about half the interior walls, leaving in place only corridor and structural bearing walls. It will create 36 apartments with four studios, 27 one-bedroom and five two-bedroom units with two units being market rate.
The design also calls for a 3,000-square-foot deck atop one-story sections at the rear of the building for use by the restaurant and by residents. The building has 6,000 square feet of ground floor commercial space, including restaurant space that Peterson wants to fill with “new unique dining.”
The Housing Company will add new, enclosed staircases at both ends of the building because the original staircase is too steep and narrow for modern considerations. The elevator has a capacity of only about five people Peterson said.
A new elevator will be built in the space of the old elevator and existing, adjacent staircase.
Anderson is predicting a fall 2017 construction start and fall 2018 reopening.
Still the tallest building in downtown Idaho Falls, the Bonneville Hotel, built in 1927, started to fade in the 1960s, but it remained a popular lunch spot into the mid-1990s.
“Since then there have not been any strong uses,” Radford said.
The structure has remained active since then, however, with about 60 residents living there now. The Housing Company will work individually with each tenant to relocate them and offer each $500 for moving costs, $1,200 in rental assistance and $250 to cover security deposits at new residence, Anderson said.
One of The Housing Company’s regional managers in Blackfoot will work with the tenants.
“We want to find out what the tenants’ individual needs are,” he said.
Peterson oversaw the renovation of the 1905 Whitman Hotel in Pocatello and with it experienced the surprises and challenges that typically involve historic properties. That did not dissuade him from pursuing a request from the city of Idaho Falls to submit a proposal for the Bonneville Hotel.
“I have a real passion for these older buildings that have kind of fallen out of use,” he said. “They have good bones. They built an iconic building (in Idaho Falls).”
The Housing Company
The Housing Company is an 501(c)3 nonprofit corporation that helps Idaho communities address affordable, workforce and senior housing issues.
The Housing Company owns 31 apartment complexes with mixes of affordable and market rate housing and Section 8 rental assistance. Eleven are in the eastern Idaho cities of Blackfoot, Pocatello, Chubbuck, Driggs, Rigby, St. Anthony, Rexburg and Ashton. The Bonneville would be its first Idaho Falls property.
The Housing Company is a self-supporting, independent corporation, said Katrina Thompson, marketing and communications manager for the Idaho Housing and Finance Association. It is supported by rental income, property management fees, developer fees and investment earnings.