The North Bend Eagle

 

 

NB Estates under scrutiny

Nathan Arneal
Published 5/29/19

The 50-year loan that funded the construction of the North Bend Estates comes due in 16 years, and the North Bend City Council is concerned about its ability to pay it off.

At the May 21 council meeting, city officials discussed options with Kim Fehringer, a multi-family housing specialist with the United States Department of Agriculture.

North Bend EstatesThe North Bend Estates were build on a 50-year loan. The city council is concerned about paying the loan off when it's due in 16 years.

The situation at the Estates came to the city council’s attention when the management company R.W. Investments recently gave 30 days notice that it is resigning as manager of the apartment complex.
R.W Investments, based out of Omaha, has been managing the Estates since 2005.

The North Bend Estates, two buildings of eight one-bedroom apartments at Eighth and Locust west of the Catholic church, began as “low-rent housing for the elderly” restricted to residents age 62 or older. The age restriction was removed in 2007, allowing anyone older than 19 to rent an apartment in the Estates.

In 1985, the city created the North Bend Housing Authority to oversee what would become the North Bend Estates housing project. The Estates opened in 1987, built with funding from the Farmers Home Administration, which has since been folded into the USDA. The loan of $495,720 was to be paid back over 50 years through rent collected.

Rent, which includes utilities, is set at 30 percent of the renter’s income, Fehringer said, with the USDA subsidizing the rest through rental assistance.

Currently, only 10 of the 16 units are occupied, and the council is worried about being able to pay off the loan by its maturity date in 2036. There is still about $392,000 due on the loan.

“If you walk into it right now with the loan on it, it’s upside down,” councilman Ken Streff said. “It’s not worth what we owe on it. It may not be us on the council, but someone much like us 16 years from now is going go, ‘We owe what?’”

Fehringer said better advertising and marketing would help fill the empty apartments, especially if there is still a perception in the community that the Estates are still limited to senior citizens.

“If you have a new teacher that’s coming into town, they have an apartment complex they can live in,” Fehringer said. “If you have a mother and one child, they could fit into a one-bedroom unit if they needed to. It’s not that it has to be a long-term solution for them. They could need it for a year or a year and a half or what have you.”

Fehringer said she believes the Estates can still be paid off in 16 years. With the amortization schedule, more of the principal will be paid down in coming years. She pointed to Dodge, where they have three such housing units and two of them have already been paid off.

“I think your first concern is getting a manager to run it,” Fehringer said, “and getting some positive advertising out to get people actually in it.”

Councilman Dan Minarick said he didn’t think the city government should be involved.

“My philosophy is that we shouldn’t be in competition with other landlords inside town,” Minarick said. “We shouldn’t be in the business of housing at all.”

Minarck said he would like to see the Estates sold to a private entity, but he said the city would likely lose money on such a deal.

 

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