The U.S. Department of Housing and Urban Development said the Chattanooga Housing Authority's proposal to build 18 townhomes for $4.8 million is too expensive to be approved, according to CHA officials.
"Dealing with government and funding, there is always scrutiny of how you use money," housing authority board Chairman Eddie Holmes said after the board's meeting Tuesday. "You never get all that you ask for. You have to negotiate and have a meeting of the minds."
The housing agency plans to make changes to the plan and resubmit it today.
Naveed Minhas, CHA's vice president of development, said CHA would reduce cost for 18 townhomes to about $4 million. The units will have two or three bedrooms, instead of one or two, and more space.
"We believe that will be acceptable to HUD," Mr. Minhas said.
Demolition of the current Fairmount Apartments is scheduled about September, he said.
Mr. Holmes said he's optimistic that HUD will approve the funding because all parties, including CHA, the residents and Mayor Ron Littlefield, are in accord.
WHAT'S NEXTToday: CHA expects to send HUD a revised proposal for 18 townhomesMid April: CHA expects to hear a response from HUDSeptember: Demolition scheduled for Fairmount Apartments
Despite past criticism from Mr. Littlefield about the site being too dense when CHA sought to build a 36-unit apartment complex there, the city now supports the housing agency. The city is expected to give about $250,000 in manpower and money for walkways and infrastructure connecting the
site to the community, Mr. Minhas said.
Richard Beeland, spokesman for the mayor, said the city agreed to help after learning that HUD did not approve the townhomes because of the increased cost.
"We've seen a cooperative effort on behalf of CHA. They've reached out to the community, and we're happy with the direction that this project is taking," Mr. Beeland said.
Pete Lapina, spokesman for Friends of Fairmount, could not be reached for comment. The neighborhood group comprises residents who live near the site.
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Article: Chattanooga: CHA opens waiting list for scattered-site housing