Housing Authority takes step to resolve debt
May 18, 2009 · 4:38 PM
The Kitsap County Consolidated Housing Authority (KCCHA) Board of Directors approved a measure that sets the stage to resolve KCCHA debt issues related to the Harborside Condominiums and the Poplars project, according to a press release.
“The Kitsap County Board of Commissioners and the Housing Authority Board of Directors have put in a lot of time and effort to craft and implement a plan to deal with agency debt issues that could negatively impact all citizens of the County,” stated KCCHA Board Chair (and North Kitsap Commissioner) Steve Bauer in the release. “The proposed action and plan by the County to issue bonds and use assets from disposition of other properties is a positive step in the right direction. It is a creative resolution to one of the biggest challenges to ever face the agency and the County.”
The Harborside project was financed and developed by KCCHA as the Urban Renewal Agency for the City of Bremerton, with the debt guaranteed by Kitsap County. Due to the collapse of the housing and credit markets, KCCHA became unable to repay the loans at their maturity.
On Monday the KCCHA Board approved a County Loan Agreement between Kitsap County and KCCHA that will allow KCCHA to restructure debt for Harborside and Poplars and accept a loan from the County to pay off Housing Authority debt for the two projects. The terms of the agreement require the Housing Authority to liquidate all of its non-low income housing assets, and to pledge excess revenues to the County to help retire the debt. The County will manage the sale of the condominiums and liquidation of the Housing Authority’s assets.
The new County loan replaces $31.09 million in Harborside debt, and $5.1 million in Poplars debt. It also provides available credit of $4.32 for project carrying costs and interest on the loan until it matures in four years, which allows the condos and KCCHA assets to be sold under more favorable market conditions. Any debt remaining after four years will be rolled into long term debt to be issued by the County that will be repaid over a 20-year period, thereby minimizing impacts to the County budget.
The mission of the Housing Authority has been re-focused to providing quality low income housing for approximately 2250 seniors, families and special needs residents of our County. The KCCHA Board adopted a resolution this afternoon officially withdrawing as Bremerton’s Urban Renewal Agency stating “The KCCHA Board now confirms the over arching goal of The Authority is to provide a continuum of affordable housing opportunities, both rental and homeownership, to low-income households.”
The KCCHA Board and staff are also working to resolve the agency operating deficit and are in the process of developing a sustainable budget. “Much has changed at KCCHA over the last eight months” stated Interim Executive Director Debbie Broughton, “Those that were responsible for the current financial dilemma of the Authority are no longer a part of KCCHA. Both the current Board and the management team inherited these problems and have been working diligently to resolve them. We have a ways to go but I am very pleased with the progress we are making.”