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COUNCIL APPROVES CONCERN BAILOUT
Friday, August 1st, 2008 -- 8:49 am
Posted by Riley Hebert-News Director
Concern Management is selling its rental units in Neillsville.
The Neillsville City Council approved a bailout for the struggling non-profit Wednesday night.
They agreed to write off around $157,000 in debt.
The move will allow Concern to sell the units to the Wisconsin Housing Preservation Corporation.
Robert Ollech of Concern Management explained Concern was started over 30 years ago.
"These guys got together, took advantage of government programs at the time to build these units of low-income housing," Ollech said, "Over the years, they've kept them in good repair. In general, (government) subsidies have helped make them economically viable because market rents in Neillsville aren't what they are in a more urban area."
They've constructed 6 buildings with over 90 rental units catering to low-income residents. In most cases, renters pay a percentage of their income and the federal government covers the rest.
The city became involved when Concern constructed the O'Neil Terrace and Pine Court Estates. They utilized a federal housing program by which the city was awarded a grant and then lent the money to Concern.
"The program said: to participate in this program, you have to make one-fourth of the units available to low-income folks," Ollech noted, "As they put that project together, they assumed the economic activity in Neillsville would grow and the rents would come up to some level that would support the project."
"That, unfortunately, has not happened. In fact, as we look at projections, we're $5 under what folks that put the projections together 20 years ago figured we at 20 years ago."
Despite their non-profit status, Concern has opted to pay property taxes; that will change when the units change hands. Wisconsin Housing Preservation Corporation typically does not pay property taxes, but will likely make a "payment in lieu of taxes" of around 50% of the total bill.
WHPC also agreed to keep Concern's current staff employed and expressed a desire to locate a regional office in Neillsville.
Cardinal Capital – WHPC Financing Arm
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