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Hill Street School Redevelopment Wins $2.5 Million in State and Federal Funding

A conceptual drawing provided by Gorman & Co. of the finished project.

GLOBE- Gorman and Company LLC, the company that’s redeveloping the Hill Street School as affordable housing for elders, has won nearly $2.5 million in federal and state tax credits. 

The Arizona Department of Housing announced the federal and state awards on June 3. ADOH is distributing a total of $30.1 million in federal 9% Low-Income Housing Tax Credits (LIHTC) to 16 affordable housing projects throughout the state. Seven of those projects are in rural communities and nine are in metro areas. The state tax credits total an additional $2 million. 

The Hill Street School project received a 9% LIHTC reservation of $1,494,188 and a state tax credit allocation of $1 million.

Gorman plans to rehabilitate the historic school building as well as integrate a new structure into the school’s non-historic façade. The project will result in 64 units of mixed-income multi-family housing targeted to seniors. The intention is to create a beautiful housing community that will retain and beautify the characteristics of the neighborhood while enhancing the proud history of the old Hill Street School. 

Supporters of the project anticipate it will transform the Downtown District and make the largest economic impact to the community of any project in decades.

ADOH set records with this year’s award cycle. A record number of overall LIHTC applications – 33 – were received, and the seven rural projects awarded are the most in state history. 

The other $1 million in state tax credits is going to a project in Yavapai County. That project and Hill Street School are the first rural projects ever to be awarded state tax credit funding.

ADOH says this year’s tax credit funding will lead to 1,142 additional housing units in Arizona. And ADOH Director Tom Simplot says the department’s funding programs will contribute to the development of a total of 8,574 new affordable housing units in 2022, which is more than three times the total from 2021.

According to ADOH, these record-setting numbers are the result of a complete re-write of the state’s Qualified Allocation Plan, which details all policies and procedures for LIHTC awards. In the process of reformulating the QAP, ADOH held tailored focus groups to listen to feedback from affordable housing stakeholders, receiving more than 600 comments.

The application’s length was reduced from more than 300 pages to less than 50, and many other changes were made to the scoring and evaluation process. 

Simplot said, “This new process reduced the burdensome regulatory framework for allocating these highly coveted tax credits and has led to increased developer interest in building affordable housing in Arizona. The State Tax Credit program is fulfilling its goal to stimulate the construction of new affordable housing in our state.”

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