In late April, Golden West Senior Living achieved a major milestone: completing the financial closing for the Low-Income Housing Tax Credit and Renovation Project to renew and revitalize our community’s buildings.
Prior to stepping in as Golden West’s new CEO and executive director, a big part of John McCarthy’s job as Chief Financial Officer was supporting the evolving analysis that finally made this $20 million renovation project a reality.
“We essentially closed on the project on April 23, which establishes a partnership between Golden West and the investor,” said McCarthy. “That partnership subsequently provides the funds for the construction project, and it basically starts the clock on our 24-month time window to complete the renovations under the program.”
Closing means Golden West has established the partnership, which provides the construction loan funding for the project. The first of multiple phases of construction is set to begin in early June and will last about six months. Subsequent phases will vary in length depending on scope. Then, once construction is completed and resident occupancy stabilized, a second financial closing will set the final debt for Golden West and the project.
“I’ve been working on this Low-Income Housing Tax Credit project with [previous CEO] John McCarthy for the five years I’ve been with Golden West, so I’ve been a part of the process and contributing to the decision-making and the movement of this project all along,” said McCarthy. “So essentially for me, after John’s retirement in March, it has just been about getting the closing piece to the finish line.”
However, when McCarthy stepped in as CEO in early April, the rise of COVID-19 intervened, interrupting the financial closing and complicating the typical process that would wrap up the agreement between the parties: attending meetings, trading documents and signing finalized contracts.
The crisis also required McCarthy to consider a new construction timeline adapted for these strange new circumstances, including social distancing requirements. Since COVID-19 hit, McCarthy said, he has been very focused on reworking the construction schedule with the general contractor “so that we can provide maximum safety and protection to residents and staff as we navigate the startup for the project.”
This has meant disruptions to prework started in March to prepare the physical space for phase one of construction, which was paused in April due to COVID-19 and is scheduled to restart in May. Direct work on resident apartments will also begin later than initially planned so there is time to implement social distancing conditions in which construction workers would have no contact with residents or staff.
“Now, the beginning phases of the project will be in areas of the building that can be successfully cordoned off from residents and staff: the common areas of the central tower and the administration offices on the first floor. That is where it’s easiest for us to achieve that separation,” said McCarthy. “These areas will have separate entrances, so construction workers are not going into resident occupied areas, as well as protective barriers with negative air pressure behind them.”
Golden West was awarded a Federal Low-Income Housing Tax Credit by the Colorado Housing and Finance Authority back in 2017, which the community pledged to use for renovations. Congress created the tax credit program in 1986 under the Federal Tax Reform Act to encourage the construction and rehabilitation of low-income rental housing by offering investors an incentive.
In the coming months, as the Low-Income Housing Tax Credit and Renovation Project moves forward, McCarthy said he will continue to provide the community with ongoing communication during each step of the process. After phase one, workers will start additional phases to renovate resident apartments, corridors and public spaces in other areas of the building.
With phase one of construction soon to begin, McCarthy said he, Golden West’s Board and the contractor will continue to review the subsequent phases of construction in anticipation of various scenarios related to COVID-19, and adapt the timeline depending on how demands and needs change.