Long-anticipated workforce housing could be under construction by summer in Golden Gate

A workforce housing project at the former Golden Gate golf course owned by Collier County, could finally be under construction this summer.

One thing after another could have derailed the plans.

The COVID-19 pandemic, Hurricane Ian, contaminated soil, escalating construction costs and rising interest rates converged over three years to cause myriad delays.

Now, the necessary financing for the first phase of a two-phased project is in its final stages, with expectations of finalizing it by the end of May.

The first phase of the project will target essential workers, such as teachers, nurses and police officers, offering them more reasonable rents to help combat the county's affordable housing crisis.

There will be nine apartment buildings, with 252 units, and a clubhouse. The project is called Renaissance Hall at Old Course.

A second phase – to be financed and built later – will provide low-cost housing to seniors and veterans, addressing another part of the dire need. This part will be smaller, with 120 rentals.

Recent studies have shown nearly 50,000 households are cost-burdened in Collier County, meaning they spend more than 30% of their income on housing expenses – and nearly half are deemed severely cost-burdened, spending more than 50%.

On March 26, county commissioners approved amendments to the developer agreements and revised lease terms with Rural Neighborhoods, to keep the workforce housing project moving forward.

The amendments weren't without controversy, with one commissioner voting against them – and the county clerk continuing to raise concerns about the financial terms of the private-public partnership.

Dan Kowal cast the lone no vote, going as far as to question whether the county had chosen the right developer for the job. He wasn't on the commission when it selected Rural Neighborhoods in 2020.

"By no means am I against the end result of this project," Kowal said. "I just don't know if we have the right team."

He criticized the time it has taken to get the project off the ground.

Commission chairman Chris Hall added that he wouldn't have made the deal, if he'd been on the board at the time of the decision. But in the end, he supported moving it forward.

Under a 99-year contract with the county, Rural Neighborhoods will build and manage the project. The developer would lease about 22 acres for $10 a year from the county.

More: Affordable housing at Golden Gate Golf Course in Naples gets approval after delays

Loan approved, but requires HUD guarantee

For the first phase, Rural Neighborhoods has secured a $57 million loan for a first mortgage from Prudential, but it's awaiting the approval of a required loan guarantee from the U.S. Department of Housing and Urban Development, said Steven Kirk, company president.

"I can't control HUD," he said, in explaining the hold-up since February, which has caused some frustration.

He hopes to get HUD's approval by the end of May, then move toward a loan closing, which could take another 30 to 60 days.

"We want to close as quickly as we can and commence construction as fast as we can," Kirk said.

Many of the delays, he said, happened because of unforeseen circumstances, outside of his group's control, including contamination at the site.

The goal is to break ground by July 1, if not sooner. Construction is expected to take 22 months, but the first buildings could be ready for move-in 14 to 15 months after vertical construction starts, with water and sewer lines already under construction by the county that can be extended to the site, Kirk said.

Funding will come from several sources, including state and federal grants, and a $10 million donation, provided by three nonprofits, the Collier Community, Moorings Park and Richard M. Schulze Family foundations.

About a year ago, county commissioners unanimously agreed to change the income targets and eligibility rules for the workforce housing, which were in part necessary to meet the requirements for government grants, and a factor in securing favorable private financing.

Commissioner Kowal raised concerns about those already-agreed-upon changes before the vote on the amended developer and lease agreements, catching Kirk off guard.

The commissioner questioned whether shifts in the income targets might make it tougher to serve the right people, particularly police officers or sheriff's deputies. In response, Kirk explained most first responders could still qualify for a good percentage of the units, based on their average wages, which can easily top $60,000.

Most of the rentals will be restricted to those making more than 80% and up to 120% of the area's median income.

At 80%, a single person would earn $55,920 a year, so it would take just one more dollar than that to qualify at the primary income targets for the units, Kirk pointed out.

He said the changes in income targets were encouraged by county staff, designed to better meet the needs of working professionals in essential services, he said.

Rents are expected to range from a low of $872 for a one-bedroom to a high of $2,414 for a three-bedroom, based on income. On average, the apartments could be $200 to $400 below market price, Kirk said.

"If you make more money, you are going to end up with a higher rent. And I think that is a reasonable bargain," he said.

Based on the developer and lease agreements, the project would remain income restricted for 99 years, after which it would become county owned.

"This is basically perpetually affordable," Kirk said, making it a bit unique.

Also, he said, Rural Neighborhoods has agreed to share a percentage of the profits from the development with the county.

Cost-sharing plan will net more money for affordable housing

County commissioners approved the cost-sharing agreement for the first phase of the project at the same board meeting, two weeks ago.

Under the agreement, 50% of the profits will go to Rural Neighborhoods, 25% to the Collier Community Foundation and 25% to Collier County.

Funds flowing to the county and the foundation are to be used toward the development of more workforce and affordable housing in Collier. Rural Neighborhoods is also required to set aside half of its profits for the same purpose.

That kind of cost sharing was not envisioned when the nonprofit answered an invitation to negotiate a deal, Kirk said.

"It's not what we signed up for," he said.

In his eyes, the county will get an "extraordinary return" on the first phase, with an expected return of $55.4 million over 40 years, coinciding with the term of the first mortgage.

He noted that much of the $18.4 million the county is putting into the project is grant money, earmarked for the purpose of addressing the housing crisis. The county's investment includes the value of the land, which it purchased a few years ago.

The county could see a return of more than $150 million, with 75% of the project's profits going back into the community, in total, a "heck of a deal for the taxpayers," Kirk said.

Still, Collier County Clerk Crystal Kinzel is concerned the county is leaving money on the table in the deal.

After commissioners approved the amended developer agreement, the revised lease agreements, and the cost-sharing plan, Kinzel asked the board to reconsider its decisions, but it didn't.

Several commissioners questioned why she didn't speak up sooner, but then allowed her to speak her mind.

Her concerns include a lack of specificity on how the shared profits will be spent in the county, especially by the Collier Community Foundation, and what exactly would be produced by it.

She also suggested the sharing agreement could have been for more than 40 years, netting the county more money to address the shortage of affordable housing, down the road.

If financing isn’t secured by May, the developer agreement would have to come back to the commission, which could open up the deal to debate once again.

The county bought the 165-acre golf course at Golden Gate Parkway and Collier Boulevard in 2019 for $29 million.

Rural Neighborhood's workforce and senior housing is but a piece of what's planned on the site. Other projects include a veterans' nursing home and a golf and entertainment complex.

More: Negotiations with nonprofit to redevelop, reopen Golden Gate golf course move ahead

More: Collier leaders get update on plans for veterans nursing home at golf course site

Naples Daily News reporter Liz Freeman contributed to this story.

This article originally appeared on Naples Daily News: Workforce housing construction may start this summer in Golden Gate