Texas company wants to buy Jefferson Commons

American Housing wants tax break, but says it would fund scholarships
Friday, September 26, 2003 | 12:00 a.m. CDT; updated 4:35 p.m. CDT, Thursday, July 10, 2008

Texas-based developers JPI want to sell their Columbia luxury apartment complex, Jefferson Commons, to a Texas nonprofit corporation that specializes in low-income housing.

But American Housing Foundation instead wants to use the cash flow from the 260-unit Jefferson Commons to fund scholarships for low-income students, a plan which the foundation believes is the first of its kind.

But, because nonprofit organizations do not have to pay property taxes in Missouri, American Housing's experiment would cost Boone County nearly $150,000 a year in revenue.

American Housing is preparing to ask the Industrial Development Authority of Boone County for a second time to issue tax-exempt revenue bonds to fund the purchase of Jefferson Commons. American Housing's first request for a $25 million bond issue was rejected by the authority in June.

The IDA was split over the nonprofit's initial request because some board members questioned whether its mission included issuing bonds to entities like American Housing. Among the authority's stated goals is to create "measurable growth" in the manufacturing, distribution, warehousing and pollution-control industries. Yet, American Housing proposes to create just five jobs with an average, annual salary of little more than $10,000. The IDA's charter also notes that applicants for the bonds should not be granted a "competitive advantage" over other companies in the local market "when the project is residential in nature."

  • Jefferson Commons is appraised at $13.3 million - significantly less than the $25 million bond issue American Housing requested in June. Boone County Assessor Tom Schauwecker said the appraisal is based on the sale of similar apartments in the area.
  • American Housing's initial proposal to the authority noted that the nonprofit's Educational Opportunity Plan would generate an "unrestricted, non-endowed do-nation" to local colleges and universities. Half of

  • Jefferson Commons' cash flow would be earmarked for first-generation college students or students whose family income is less than 60 percent of the area median income. The other half of the cash flow would be used to pay off the bonds.
  • If the Boone County authority grants American Housing its bond deal, the Columbia School District would lose roughly $120,000 a year in revenue, according to the 2003 tax bill for Jefferson Commons.
  • American Housing Foundation is finalizing contracts to purchase Jefferson Commons and 12 other JPI-owned apartment complexes around the country said Daniel Owen, American Housing's vice president of development.
  • The nonprofit qualifies for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, which means its activities must serve a public purpose and its assets must serve a charitable function. To date, it owns 7,481 apartment units in Texas and Oklahoma - assets valued at more than $34 million, according to American Housing's 2001 tax documents.

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