MOBILE, Ala. (WALA) – The Gayfers department store building downtown has been vacant and deteriorating for more than 35 years, but it may be poised for a rebirth.
The nonprofit Gulf Coast Housing Partnership paid about $1.4 million for the property in 2015 with plans of renovating it and creating affordable housing units. But one obstacle has dogged the project – cost.
“Some funding that we initially thought might be there for the project and the costs, the combination of the two, kind of did not allow us to move forward before now,” said Tom Champion, senior vice president of development for the nonprofit.
The missing piece of the puzzle could be $8 million form the city’s share of the American Rescue Plan Act, passed to fight the coronavirus. Mayor Sandy Stimpson has proposed using that portion of the money to close the funding gap on the Gayfers project.
“Without the ARP money, well, you can’t close the gap to make it doable, and the downside for the city of Mobile is the longer that it stays vacant, the more it’s gonna cost to, you know, to renovate it,” he told FOX10 News. “And so this, we look at it as really a generational opportunity.”
The Mobile City Council would have to approve the spending. It is part of a comprehensive plan that the mayor has submitted for spending more than $58 million in federal COVID-19 aid.
The vision is for something that does not currently exist in downtown Mobile – a large-scale residential development for people with low and moderate incomes.
“We just think it’ll be a really transformative project, you know, for the city, and ultimately for the residents,” Champion said.
The project would maintain the historic façade but otherwise completely overall the 56,000-square-foot building and add 1½ stories. The plan calls for 94 loft-style apartments, mostly one- and two-bedroom units ranging from about 600 to 900 square feet.
But Champion said the sizes would vary; they would not be “cookie-cutter” apartments. They would, however, rent for far less than the going rate downtown. Champion projected rents would be between $569 and $773 a month, depending on size and the renters’ incomes.
Rents would be capped. Most of the apartments would be reserved for people making 60 percent of the area’s household median income. That works out to about $35,000 a year for a family of four.
The Mobile Housing Authority has pledged $1 million in exchange for setting aside 19 of the apartments for extremely low-income people. Eligibility for those units would be households at half the median income – about $19,000 or less for a family of four.
Michael Pierce, executive director of the agency, told FOX10 News that the project will create opportunities for low-income residents in a “high demand and growth” part of the city.
“Additionally, MHA’s limited participation reduces the concentration of poverty while satisfying federal site and neighborhood standards,” he said in a statement. “The project is a win-win-win for low-income residents, MHA and the city.”
In addition to the apartments, plans call for retail or commercial space on the ground floor. Champion said the building likely would have a fitness center and a rooftop deck and other amenities.
Both the mayor and Champion said the project will provide housing for the lower-paid, downtown service workforce. Many of those residents would be able to walk to their jobs.
City leaders have tried for years to attract residents downtown, which could spark retail development. Mobile has had some recent success, but Stimpson noted that it has all been higher-end projects.
“This is addressing a major problem that we have in the city of Mobile about affordable housing – and especially inside (Interstate) 65,” Stimpson said. “And if you’re a downtown merchant and you have an opportunity to have your workers living where they can walk to work, it’s huge for the worker.”
“You’ve got a blighted building that you’re able to redevelop,” he said. “You have a historic building with a great history that you’re able to preserve. And in this case, we’re able to provide housing, workforce housing units, for our future residents.”
Champion said seven or eight different funding sources, including private loans and historic tax credits, would be part of the mix. He said it is a complicated project because so many different entities are involved and because of all the approvals the organization had to get for the historic tax credits – down to details like the types and locations of windows.
But if the City Council approves the city spending this summer, he said the financing could be locked down by the end of the year. Construction would take about 14 months, he said.
“And we’ll start construction immediately upon closing all of the financing,” he said.