News

Purchase option agreement extended for former hospital site

St. Elizabeth
The Hannibal City Council recently extended a land purchase option with The Villas of Saint Elizabeth, LP, the developer that wants to convert a portion of the former Saint Elizabeth Hospital site in Hannibal into senior apartments.
By Danny Henley, Courier-Post Reporter
Posted: Feb. 1, 2019 3:00 pm

The Hannibal City Council recently extended a land purchase option with The Villas of Saint Elizabeth, LP, the developer that wants to convert a portion of the former Saint Elizabeth Hospital site in Hannibal into senior apartments.

The council approved a two-year extension during its Jan. 15 meeting, just two weeks before the existing land purchase agreement for 109 Virginia St. was scheduled to expire.

"I put this out for two years so we are not sitting here in 12 months doing the same thing," Hannibal City Manager Jeff LaGarce said.

LaGarce said that extending the lease agreement for two years will not put the city at a disadvantage. "There is nobody else in line (for the property)," he said. "We don't want the option to expire. We have an investor. They have a good project."

The council approved a resolution Dec. 19, 2017, entering into a 50-year lease at a rate of $1 per year with The Villas of Saint Elizabeth, LP, and the land purchase agreement was included in the lease.

The lease was drafted when the developer explored the possibility of securing funding through a federal historic grant program. A criteria of that program was the grant seeker either own the property or hold a lease of at least 50 years.

The city took ownership of the Virginia Street property in order that the site might be eligible for an Environmental Improvement Energy Resources Authority (EIERA) grant for as much as $200,000 to help pay for the removal of asbestos. The property must be owned by a public entity, such as the city of Hannibal, to be eligible.

Another benefit to the city seeking an EIERA grant is that it lowers the cost of rehabilitating a portion of the property. It was anticipated that reducing the project's cost would enhance the chances that the developers could secure Missouri Housing Development Commission (MHDC) low income housing tax credits to help pay for the estimated $9.5 million project.

The project was not awarded tax credits by the commission in 2018.

"The MHDC had more applications than they had tax credits," LaGarce said.

Despite the fact the MHDC did not award it tax credits last year, enthusiasm for the project remains strong.

"The MHDC really likes their application. They also like the public support (for the project)," LaGarce said. "There is nothing fundamentally wrong with the project. They (developers) are going to resubmit (to the MHDC) in 2019."

 

danny.henley@courierpost.com



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