Guam – The Guam Housing and Urban Renewal Authority has awarded 2011 tax credits worth millions of dollars for the construction of affordable housing for two separate companies who were designated as the 4th and 5th choices by their own selection committee. Tuesday, the board explained why they chose not to negotiate with the 1st 2nd and 3rd choices, even though they would have built more houses at a lower cost.
“Our focus of course is that we want to build homes and we want to build as many homes as we can with the low income housing tax credit,” said GHURA Board Chairman Dave Sablan on Friday (Dec. 23rd) before the before the board decided today (Tuesday 27th) to award 2011 tax credits worth millions of dollars to two companies who will build less homes and at a higher per unit cost than the number one ranked applicant. In fact out of the five companies who applied they awarded the credits to the 4th and 5th ranked companies. The board’s selection committee ranked Talo Isla number one, Ironwood Highlands number two, Lada Senior Housing number three, Great Homes number four, and Tower 70 number five. So why didn’t they opt to negotiate with the first three highest ranked companies? “These three companies or these three developments basically have issues with site control they’re either litigation or probate and they did not have clear evidence that they had use of the property,” explained Sablan.
So instead the board opted to remove the first three from the rankings and negotiate with numbers four and five or Great Homes and Tower 70 respectively, making them the new number one and number two. However, this move by the board was actually done after GHURA had already begun negotiating with numbers four and five. “The executive management and our legal counsel have then been tasked to finalize negotiations moving forward with number one and number two that being Great Homes and Tower 70 consecutively and they’ve been doing that for the past week or so with Great Homes and Tower 70 respectively and they’ve been doing that I guess for the past week or so since the 15th of December,” said Sablan.
Great Homes which was originally the fourth pick and now moved up to number one is comprised of non-profit org Catholic Social Services who owns 90 percent and an LLC called Marianas Affordable Home Company which is in turn made up of the Calvo Finance Corporation and Jones and Guerrero inc.
Prior to meeting with great homes a couple board members made disclosures. “I want to disclose to the board members that I am a distant relative to one of the players of the companies here no direct or indirect interest in any of the companies other than relations of my last name is there any of the board members who wish for me not to participate say your mind,” said GHURA Vice-Chairman Ricardo Calvo. There were no objections. Then GHURA board attorney Mark Smith made a disclosure. “And also myself I’m married to Clare Calvo and I have no financial interest or anything to gain of this and my work has been fair and objective throughout,” said Smith. “Besides your responsibility to us is legal advise your not suggesting anything your not recommending anything you’re just there to give us legal advise,” replied Sablan.
The board then met with representatives of Great Homes including Champ Calvo and Leonard Calvo of the Calvo Finance Corporation, Diane Calvo and Jesse Catahay of Catholic Social Services and a representative of Jones and Guerrero. “It was our objective working with Catholic Social Services to build a community that would service and address the need for affordable homes which is one of the missions primary missions of catholic social services,” said Champ Calvo.
Great homes had originally applied to build 60 homes but today told the board they would build 21 more. The board approved this application and now great homes will get $2.99 million in tax credits to build 81 homes in Yigo at a cost of about $37 thousand dollars per unit. This left about $1.1 million in tax credits for 2011. This was then given to the number five ranked company Tower 70. This company is comprised of Robert Salas and Keith Farrel. They actually applied for $2.5 million to build 70 units in an eleven story condo style building. So today the board decided to award them $1.1 million to get the project started with the promise to give them additional funding from future or 2012 tax credits for a total of $2.5 million dollars for 70 units. This means GHURA will award a total of $5.4 million in tax credits to build a total of 151 homes while Talo Isla which was originally ranked number one would’ve built 170 homes for a little over $4 million dollars.
Talo Isla would’ve built 170 units at cost of about $23.9 thousand per unit while tower 70 is building 70 units at a cost of $35.7 thousand per unit and great homes is building 81 units at a cost of $36.9 thousand per unit. Again the board’s justification for this decision is because Talo Isla and the other two applicants had issues with site control.