STAFF REPORT
Glasgow News 1
Barren County officials are reshaping the financial structure of a proposed senior housing project in Glasgow in hopes of making it more competitive for state tax credits.
The Barren County Fiscal Court has canceled Wabuck Development’s option to lease the former health department property at 318 West Washington Street and approved a new lease option with the Hero Foundation, the nonprofit arm of the Glasgow Housing Authority.
The development, known as Highland Heights, is planned as a 75-unit residential project that will offer low-cost housing to elderly residents.
According to Wabuck representative April Bowman, the change in the lease option is tied directly to the project’s application for low-income housing tax credits through the Kentucky Housing Corporation.
Bowman told magistrates at this week’s fiscal court meeting that the new structure gives the project the best possible chance in a highly competitive process that scores applications on factors including location, renter cost burden and employment opportunities.
Wabuck, a Leitchfield-based affordable housing developer, initially secured an option to lease the county-owned property earlier this year as a consultant and co-developer on the project.
The option was written so it could be assigned to the nonprofit that would ultimately take on the project, but Bowman said new guidance from the state housing corporation created a scoring problem.
One section of the competitive scoring looks at “below-market sources,” including donated property.
Bowman said the Hero Foundation had offered to contribute toward the property, which could help Highland Heights under the scoring criteria.
However, state housing officials recently clarified that if Wabuck remained in the middle of the transaction as the party holding the lease option, the project would not receive the same scoring benefit.
To solve that issue, Wabuck asked the fiscal court to void its option and enter into a new option directly with the Hero Foundation.
Bowman told magistrates that the change does not alter Wabuck’s role as consultant and co-developer on the project and emphasized that the Hero Foundation was always intended to be the long-term lessee.
Magistrates agreed to cancel the Wabuck option and retain a previously paid, nonrefundable $5,000 fee as consideration.
They then approved a new option with the Hero Foundation that sets out a 99-year ground lease at a total cost of $600,000.
The agreement gives the nonprofit until March 30, 2027, to close, with the option to extend the deadline to Dec. 31, 2027, if it pays an additional $100,000 in nonrefundable earnest money that would be applied to the total cost at closing.
The Highland Heights project would replace the former Barren County Health Department building, which originally served as the Howard Clinic, with new multi-family housing in an area recently rezoned to medium-density multi-family residential use.
Key Facts
– Barren County Fiscal Court canceled Wabuck Development’s lease option for the former health department site on West Washington Street in Glasgow.
– Magistrates approved a new option to lease the property directly to the Glasgow Housing Authority’s nonprofit Hero Foundation.
– The change is intended to improve the project’s score in the Kentucky Housing Corporation’s low-income housing tax credit competition.
– The proposed Highland Heights development would replace the former health department building with 75 senior-focused housing units.
– The lease terms call for a 99-year ground lease at a total price of $600,000, with an option to extend the closing deadline into late 2027 for additional earnest money
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