Roseburg, Ore. – A derelict hotel that stood empty for 45 long years has been reinvented as the Grand Apartments, a home for young single mothers and other low-income residents

The mixed-use development provides 37 valuable housing units in this southwestern Oregon city and has served as a needed boost to downtown.

“This project reached so many needs – community revitalization, economic development, affordable housing and historic rehabilitation,” said Betty Tamm, executive director of the Umpqua Community Development Corp. (CDC), the nonprofit developer.

Low-income housing tax credits (LIHTCs) and historic rehabilitation tax credits were the key, but not the only, financing sources. In all, there were 14 different funders, including city and state support, behind the $6.2 million project, a model for blending different subsidies, according to Tamm.

The hotel was built in 1909, but was, for the most part, shut down after a 1959 explosion. Few people believed that they would ever see it reopen.

The explosion is part of Roseburg history. A truck loaded with dynamite had parked near a downtown warehouse one day. During the night, the warehouse caught fire and the truck exploded, taking with it 13 blocks of the city.

The Grand Hotel, which had its windows blown out and suffered structural damage, was the nearest building left standing. Roseburg lost much of its downtown, so saving the historic hotel took on added importance.

There were attempts to reopen the five-story building over the years, but they never came to fruition. Another nonprofit group purchased the hotel several years ago, but then offered it to the Umpqua CDC for free. Even then, the organization, which has spearheaded 16 projects and owns about 250 units, wasn’t sure it wanted the damaged building.

The Local Initiatives Support Corp. (LISC) provided money for a feasibility study. As experts examined the hotel, the development team received grim news about the building’s condition, but nothing that was a deal killer. Restoring the project would be challenging, but not impossible.

Umpqua CDC then got to work. The rehabilitation included removing asbestos tiles, leveling the uneven building little by little, reinforcing the structure, and dealing with unexpected problems along the way.

“It was the most technically difficult rehab that I have ever done,” Tamm said.

The Grand Apartments opened its doors at the beginning of 2005. Four units are market-rate, and 33 are affordable to very low and moderate-income residents, creating the desired mixed-income project. Two units target people earning no more than 30% of the area median income. Rents start at $253 for a studio.

Several units will house young women from the Safe Haven Maternity Home. Five pregnant girls or new mothers were living in the development in June. Safe Haven owns a florist shop across the street, where many of the women work and receive job training.

Amenities include four community rooms to serve resident needs. One floor has a children’s playroom. A prohibition-era cardroom has been turned into another common area. In a nice touch, the developers also recreated an old birdcage-style elevator and a marquee.

The building’s retailers include a restaurant, a woodworking gallery and an antique store. The project has boosted the entire neighborhood, with nearby merchants reporting increased business.

LIHTCs allocated by Oregon Housing and Community Services generated about $3.2 million in equity, while historic tax credits, which helped finance the commercial components, brought in another $1 million. The National Equity Fund bought both types of credits.

In addition to allocating tax credits, the state provided $100,000 from its Housing Trust Fund as well as a $475,000 loan and a $356,000 grant through Community Incentive Funds. The city provided an $80,000 grant. The Federal Home Loan Bank of Seattle, through its member Premier West Bank, provided an Affordable Housing Program grant of $258,847. The Neighborhood Reinvestment Corp. and Meyer Memorial Trust Fund each contributed $165,000 grants. The Network for Oregon Affordable Housing provided a $510,000 permanent loan, and Wells Fargo provided a $3.2 million construction loan.

Funding also came from the Oregon Energy Trust, Pacific Power, Rural LISC, and Cow Creek Umpqua Indian Foundation.

Grand Apartments

Developer: Umpqua Community Development Corp.

Total units: 37

Affordable units: 33, including several units for young single mothers.

Unique feature: The Grand Apartments is in a rehabilitated hotel that had been closed for 45 years after an explosion destroyed much of downtown Roseburg, Ore. The project pulled together more than a dozen funding sources.

Key sources of financing

Equity from 9% low-income housing tax credits provided by National Equity Fund: $3.2 million

Equity from historic rehabilitation tax credit provided by National Equity Fund: $1 million

Network for Oregon Affordable Housing permanent loan: $510,000

Oregon state loan, community incentive funds: $475,000

Oregon state grant, community incentive funds: $356,000

Federal Home Loan Bank of Seattle, Affordable Housing Program grant through Premier West Bank: $258,847

Neighborhood Reinvestment Corp. grant: $165,000

Meyer Memorial Trust Fund grant: $165,000

State Housing Trust Fund: $100,000

City of Roseburg grant: $80,000

Total development cost: $6.2 million