Framing work is in process, but a grocery store tenant remains on hold for phase two at the former Carlisle Tire & Wheel site at the corner of A and Factory streets in Carlisle.

Cleveland-based developer PIRHL started construction work this week on the Flats at Factory Square, a proposed 42-unit affordable housing apartment building, which will include 11 units targeted for veterans housing as well as units for families and people with special needs. The goal is to complete construction by summer 2020.

Carlisle Borough Council approved final plans for the project at its March 7 meeting. PIRHL representatives said then the apartment buildings will feature 14 one-bedroom units, 12 two-bedroom units and 16 three-bedroom units with rent ranging from about $620 to $1,050 per month, plus utilities. Twenty-five percent of the units are to be dedicated to veterans housing.

“We’re fully under construction for residential apartments,” said Lara Schwager, vice president of development at PIRHL. “These will be rental-only units, making up a multifamily building. Three additional buildings will also be on the site.

“Construction will be completed end of next summer and leasing will begin winter of 2020.”

Grocery store on hold

What remains up in the air are plans to have a grocer on the mixed-use site to help serve the northwest Carlisle residential area. Schwager said Price Rite, a New Jersey-based grocery chain that showed interest in the site last fall, is no longer considering the location.

“We’re reaching out to other smaller super market chains,” Schwager said. “There is a strong desire from the residents in that area and the governing body to have a grocer of some kind in that area. Our focus is finding the right smaller grocer. We’re targeting more boutique places. We’re thinking grocer, not a Sheetz or a Wawa.”

PIRHL partnered with the Cumberland County Housing and Redevelopment Authorities to develop phase one at the site — the Townhomes at Factory Square — which features 40 town houses, 12 flat apartments, a 2,000-square-foot community building and a two-acre park on site. Plans include the future extension of B and C streets through the site.

Work at the Tire & Wheel site and the nearby former IAC site, owned by Carlisle Events, are key elements of the Carlisle Urban Redevelopment Plan.

Roundabouts will be constructed at B and College streets and at B Street and Fairground Avenue as part of the related Carlisle Connectivity project, which will make improvements to roads in the area.

Veterans housing

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Schwager said 11 of the 42 units at the phase two site are designated for veterans housing, a key component of the plans for the site.

“We’ve been in contact with VOA (Volunteers of America) and other veterans groups,” Schwager said. “We know there is a need for the housing, but we can’t take applicants yet. It’s just too early in the process.”

PIRHL commissioned a market study in 2017 to understand demographic trends and affordable housing needs in the Carlisle market area, project manager Joel Patterson said in a news release. According to the market study conducted by Bowen National Research, based on 2011‐2015 American Community Survey, 5‐Year Estimates Table S2101, there were 891 veterans in Cumberland County who had incomes below the poverty level and at risk of becoming homeless.

According to the most recent Census 5-year estimate (2013-17 collections), Cumberland County had 19,630 veterans overall, with 1,500 in the Carlisle area.

Carlisle borough had 68 veterans below the poverty line, or 4.8 percent of veterans for whom income data was available, according to Census data. The poverty rate in the nonveteran population for Carlisle is 15.1 percent.

Cumberland County had 600 veterans below the poverty line, or 3.2 percent. The nonveteran poverty rate countywide is 7.5 percent.

Patterson said in a statement that veterans housing in the terms of the Pennsylvania Housing Finance Agency “simply means that we need to restrict units designated as veterans housing to those people who both certify at certain income levels and can prove status as a veteran.”

Patterson said the development can ensure and maintain affordable rents through the Low Income Housing Tax Credit program, a federal program started in 1984 under the Reagan administration.

LIHTC means the federal government apportions tax credits to state agencies (in this case the PHFA, working with the county housing authority) to give to developers. The credits mean you get a dollar-for-dollar reduction in your tax bill. In most cases, the developers themselves don’t use the credit. They sell the credit to an outside financier, which offsets their total borrowing cost for the project, thus allowing them to charge low rents on a certain number of units and still turn a profit.

Because of the benefit of the housing tax credit program, Patterson said tax credit housing developments have minimal debt in terms of a mortgage and therefore, the properties are able and required to maintain affordable rents.

“The LIHTC is a tax credit issued by the IRS under the rules and guidance in Section 42 of the IRS Code,” Patterson wrote. “This tax credit is allocated to every state Housing Finance Agency for the purpose of addressing the affordable housing needs of each state. Properties financed under Section 42 are required to house a percentage of residents earning between 20% to 80% of the area’s median income, capping qualified participants’ rent at a fixed amount.”

As a requisite for the LIHTC program award, Patterson said the Flats at Factory Square must maintain a portion of the leased units as a supportive housing set‐aside, promoting a housing preference for veterans households.

Leasing of the units is expected to begin in winter 2020. The site will include a supportive services coordinator and plans for a basic health services provider and other services like credit counseling.

“The goal is to support the people who live there,” Schwager said.

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Email Jeff at jpratt@cumberlink.com. Follow him on Twitter @SentinelPratt.