Two new residential projects will help chip away at Brownsville’s persistent shortage of affordable housing: Brownsville Lofts on Central Boulevard and Price Lofts on South Price Road.
The developer behind both projects is Jake Mooney of Overland Park, Kan.-based MRE Capital. He was also responsible for the Baxter Lofts historic renovation in Harlingen.
Ground was broken on the 70-unit Brownsville Lofts at 1860 Central Blvd. early this year, with completion anticipated in October or November, Mooney said. The project last year was awarded $1.2 million in Housing Tax Credits by the Texas Department of Housing and Community Affairs.
The tax credit program is designed to attract investors for affordable-housing projects. In exchange for buying credits offered by the developer, the investor can apply them to their federal liability each year for 10 years on a dollar-for-dollar basis.
Price Lofts was awarded TDHCA $1.5 million in tax credits just last week and has yet to go through the permitting process. Construction on the 88-unit complex will start “10 minutes after the title agency tells us we’re closed,” Mooney said.
“We’re right at the beginning,” he said. “We’re targeting an October or so closing on Price Lofts.”
Ten percent of each project will be dedicated to market-rate housing and the rest to affordable housing, he said.
“It’s good for the community,” Mooney said. “As much as I hate saying this out loud, we just keep making more poor people, and rents have gotten so high everywhere.”
Before starting construction on Price Lofts, however, the abandoned building currently at the address will have to be demolished, he said.
“We’re removing what I believe is the exact definition of blight — a vacant, gutted building sitting in the middle of a city block — and turning it into something. It’s not just that we’re building apartments. We’re removing a gigantic eyesore. It’s a vacant, empty shell of a former bad idea that will be going away.”
Mooney said roughly half of his firm’s residential developments involve rehabilitating historic buildings. One such project currently underway is the mid-century modern Metro Tower in Lubbock, that city’s tallest building.
MRE applied for TDHCA tax credits in 2017 to rehab Brownsville’s historic El Jardin Hotel. The application was not approved, though the firm did get to know Brownsville in the process, Mooney said. Along with the tax credits announced last week for Price Lofts, the Housing Authority of the City of Brownsville was awarded $11.8 million in TDHCA credits to restore the El Jardin for affordable housing and leasable commercial space.
“We took a really hard run at the El Jardin, and we just couldn’t make the math work,” Mooney said. “We submitted it to TDHCA and we did not get funded. Since that time construction pricing has exploded. Our spreadsheet just doesn’t work at the moment. We’re excited for the Housing Authority if they can pull it off. We’ve sent them all of the information that we have and we’re cheering for them.”
Meanwhile, MRE is contemplating a third residential project somewhere in Brownsville and also potential sites in Harlingen and McAllen, he said.
“We’ve got one that got funded in Del Rio, so we’re kind of working that corridor and hoping to expand pretty dramatically,” Mooney said “It’s a long ways from home but the weather’s pretty good most of the time. From a construction standpoint rain is what kills us. Snow and ice is what kills us. The climate down there, we’ve got 325 of good building days a year. Once you get up into Oklahoma … you’ve got 200.”
San Benito-based Tan Construction Inc. is MRE’s general contractor.
Mooney said his company was also drawn to Brownsville because “the demographics of the (Rio Grande) Valley are probably the best in America.”
“There’s no unemployment,” Mooney said. “Anyone that wants a job can get a good job in 10 minutes. There’s an influx of population. There’s an extremely skilled labor force. Our construction guys, they’re the best we have. These guys, they know what they’re doing. We’re excited with the growth. It’s not an accident that we’re doing business 1,000 miles away from our office.”
Like Harlingen and Lubbock, the city of Brownsville has been very easy to work with, he said.
“We’ve done business in places where it’s a pain to deal with the city,” Mooney said. “These projects have so many variables and so many moving parts and so many pieces of paper that need to be generated on the front side. The city staff down there in Brownsville has been absolutely fantastic at helping us check all the boxes to make this happen.”
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Texas’ housing agency awards tax credits to El Jardin hotel, Price Lofts
