A 17-unit affordable housing project in downtown Overland Park aimed at people who have intellectual and mental health challenges got a boost Thursday in the form of gap funding approved by the Johnson County Commission.
The commission agreed to extend a zero-percent interest line of credit to the Friends of (Johnson County Developmental Supports) so that construction costs can be met while the nonprofit continues to raise money and waits on grant money to be released.
The $2.5 million loan was requested because of the impacts of inflation on the construction costs and the sometimes slow release of grant money after it has been approved.
The Friends of JCDS is a fundraising nonprofit for the county agency that has remodeled and built homes suitable for people with disabilities, without carrying debt. It proposed the project at 79th Street and Floyd Street as its first larger scale effort, with one- and two-bedroom apartments that could house up to 19 residents.
Approval of the gap funding was a major milestone for the project, which has already been issued a certificate of conformity in Overland Park’s downtown business district. Groundbreaking is expected to be on Sept. 1.
The residents would include people receiving JCDS support as well as other providers, people supported by Johnson County Mental Health Center and others referred through eligible housing services. Most of the units would go to JCDS clients, and about half residents are expected to earn at or below 50% of area median income, said Janel Bowers, CEO of Friends of JCDS.
Fundraising and project cost strains
The project’s cost was originally estimated at $6.5 million, but has since increased to $9.7 million due to inflationary pressure. But Bowers said they were able to whittle down that $3 million gap to $2.5 million with additional fundraising and other cost-shrinking efforts.
Approval of gap funding means the Friends of JCDS has access to money at 0% interest through Dec. 31, 2027. After a certificate of occupancy followed by a three-month grace period, the amount spent that was not covered by grants or other sources would be converted to a 30-year mortgage.
Bowers and JCDS Executive Director Chad VonAhnen said a traditional mortgage with market interest rate would have been undoable because of the cost to the nonprofit.
Spending deadlines from various funding sources also have complicated the project’s schedule, she said. For instance, COVID-era fiscal recovery funds need to be spent by the end of October, and a Mabee Foundation grant of $1.1 million is dependent upon the Friends first raising at least 40% of the project budget, excluding government, mortgage and reserve funds, Bowers said. The funds are released late in the process.
Delaying the project to wait for more grant releases also could force the Friends to re-bid the project, VonAhnen said.
In an email afterward to the Post, Bowers echoed some of VonAhnen’s comments, noting that the county commissioners’ support “provides access to a line of credit that will bridge those reimbursement delays and allow construction to continue without interruption.”
“We are deeply grateful to the commissioners for carefully evaluating this request and considering it from every perspective,” Bowers wrote to the Post. “Floyd Street is not simply a building with 17 apartments. It is an opportunity to demonstrate how inclusion and independence can strengthen an entire community.”
“This project is an investment not only in housing, but also in people—and in a stronger, more inclusive community,” she added.
The gap loan would not be drawn or repaid all at once and would allow the developmental supports department to maintain its reserves better, he said. Bowers said she would continue to pursue fund raising and cost cutting in the months ahead. A contribution page for the group can be found here.
The project will include studio and gallery space for the JCDS Emerging Artists program as well as offices for the Friends of JCDS, gathering space and gardening for residents. “This is intended to be a long-term community asset,” VonAhnen said, adding later, “what this does is really reflect the JCDS mission statement about advocating alongside people to live and work in our community.”
BOCC had questions but cite need for housing
Some commissioners had questions. Commissioner Janeé Hanzlick sought reassurance that the agreement is protected by legal covenants and annual reviews that the money is being spent as intended. She and other commissioners were assured that a lien will protect the county from exposure if something happened to the Friends group.
Commissioner Michael Ashcraft calculated the yearly cost per unit at $470,000 — saying it is a price that would yield “a pretty nice home.”
VonAhnen said the project is uniquely designed for its eventual residents and is a different type of housing model than a traditional group home. Ashcraft also asked whether a loan with a nominal interest rate above zero had been considered for partial repayment to taxpayers. VonAhnen said it had, but paying interest was not feasible for the Friends group’s budget.
Ashcraft called the venture “a noble cause” but said he hesitated to vote for it because of the 0% interest rate. He ended up voting against it, “with reservation.”
Commissioner Jeff Meyers said, “I didn’t go into this without reservations but I really want to see this project succeed. I think everybody can see the uniqueness.”
Commissioner Becky Fast said the project is exciting for mental health clients, who would also benefit. A large percentage of the likely residents are living with family and aging caregivers, she said. “This is something that’s a huge need.”
Chair Mike Kelly said the project meets commission goals for expanding affordable housing options. “If we left affordable housing to the market it wouldn’t get built,” he said.
The vote was 6-1, with Commissioners Fast, Meyers, Hanzlick, Julie Brewer, Shirley Allenbrand and Chair Kelly in favor and Ashcraft opposed.
