Content area
Full text
A financing glitch has thrown Mon-Ark Design Inc., Indianapolis, into a temporary tailspin on its first residential rehab project.
One year ago this month, Mon-Ark, a young, minority-owned architectural, contracting and development firm, purchased 17 deteriorating homes at 1724 Cottage Ave. from First Indiana Savings Bank for $47,500. Under the city's rental rehab program, the company planned to renovate the structures into doubles for low-income tenants.
Since then, Mon-Ark has completed six units in the project, called Cottage Court Apartments; another unit is scheduled to be ready this September. The entire project's completion date has been reset, however, for June of 1988 -- a year later than originally planned.
The problem, according to Stephen Richardson, founder and president of the 2-1/2-year-old firm, is that Mon-Ark "had sweat equity but no back-up capital" when it first took on the renovation job.
"The Section 8 concept is an excellent idea, I'm not denying that. We initially got involved in this project because we believed -- and still believe -- it's a good foundation on which to build the company. But there's been a big problem with coordination between the city and the state," he says.
According to Richardson, the state, which pays the major portion of a tenant's rent in a Section 8 housing program, has taken as long as six months to get the first rent check to Mon-Ark. For a company that orchestrated the project with virtually no cash flow of its own, the end result is devastating, Richardson says.
Angelo Franceschina, director of Fountain Square & Fletcher Place Investment Corp. (FSFPIC), echoes Richardson's sentiment. "The state is just too cumbersome in getting the rent money to developers [who are involved in a Section 8 project.]...