Sherman recently pledged its support again for a project that will turn the former Sherman High School building into downtown apartments for elderly individuals with low incomes. The city did the same thing last year, but the project stalled after developer Sari & Company determined that the Texas Department of Housing and Community Affairs likely wouldn’t award the tax credits sought for the work.
The Sherman City Council passed a formal resolution of support for the Low Income Housing Tax Credit Program application of Sari & Company, who plans to renovate the building at 120 West King Street, which also was the former administration building for the Sherman Independent School District.
“The project that Sari & Company brought to Sherman last year, which the council did ultimately decide to support — it’s the exact same project this year, no substantive changes were made to the application,” Community and Support Services Manager Nate Strauch said. “It would take that (building) and convert it into about 70 housing units that would be for people ages 55 and over and under a certain amount of income.”
Strauch said the planned renovations have a projected cost of around $11.5 million, while the current assessment for that building is only $248,033.
“So because this is a for-profit entity at the end of the day, it would add several million dollars on the tax roll, which would be another good thing for the city,” Strauch said. “My understanding from them is based on what they witnessed last year in the process, they feel very strongly about their application’s chances this year.”
David Baca, who has been identified as a possible architect for the project, told the Grayson County Commissioners in December the return to the drawing board was precipitated by favorable changes to the state’s point-based scoring system that determines which projects will get tax credits. Baca said those changes, coupled with a new designation for the old administration building, convinced the developers to submit the project once again for tax credit consideration next month. He told the council that this year’s application also includes a partnership with a nonprofit organization that will be managing the property once it is completed.
“Because the management company is a nonprofit, they get special points for that,” Baca said. “Based on those numbers, the state put the numbers (rankings) out and currently this project is tied for first place.”
The council’s unanimous vote provides Sari & Company a letter of support it can take to the Texas Department of Housing for project approval. If that approval is received, the developer will be able to complete its housing project and receive tax credits that offset some of the cost of that project over the next 10 years. However, the project must remain as affordable housing for at least 30 years.
Sari & Company’s plans for the 63,600-square-foot building, which was built in 1917, are for it to house 69 units designed for elderly individuals with low incomes — 58 one-bedroom apartments and 11 two-bedroom apartments.
Strauch explained 46 of the one-bedroom apartments will be set aside for individuals who make no more than 60 percent of the average income for this area — about $26,520 — and their rent would be capped at $450 a month. Twelve of the one-bedroom apartments would be for people who make no more than 30 percent of the area’s average income — about $13,260 — with rent capped at $270 per month.
For the two-bedroom apartments, the average income is based on that of three people, meaning nine apartments would be for those making no more than 60 percent of the average income — $30,300 — and two would be for people at 30 percent — $15,150 — or under.
Planned amenities for the apartments, which will be named the Sherman High Lofts, include two secure parking lots, a large community room, indoor exercise track and fitness area, computer room and more.
The building originally served as a high school and middle school before becoming Sherman ISD’s administration building. The district moved into its current administrative headquarters on Loy Lake Road in 2011 and donated the property that year to Grayson County in exchange for use of the county’s voting machines and for parking lot improvements at Sherman High School. Grayson County returned the property’s deed to Sherman ISD in December because Texas Local Government Code says the county could only use it for governmental purposes. In order to sell it to the developer, it had to revert to the district.
“From the county’s perspective, we want to be good neighbors,” Grayson County Judge Bill Magers said at the time. “We want to help SISD and the city of Sherman. If we can repurpose that building it’s a win for everyone. There’s no downside to the taxpayers of Grayson County, there’s no downside to the county.”
Baca said the announcement of the LIHTC awards will be made this summer and, if approved, Sari & Company is anticipated to begin construction on the Sherman High Lofts in the spring of next year.