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Business Observer Friday, Jan. 16, 2004 15 years ago

Letter:What happened to affordable housing?

I thought that after reading your article there were only two "developers/respondents" that counted: Trammell Crow and my group, Rocco Santomenno & Wanda Di Paola.

What happened

to affordable housing?

Dear Editor:

I thought that after reading your article there were only two "developers/respondents" that counted: Trammell Crow and my group, Rocco Santomenno & Wanda Di Paola.

Gold Ring Investments is a mortgage banker, licensed in Florida, New Jersey and New York. GRI has already arranged financing on this development subject to a formal agreement with the city and the normal lender inspections.

I, a registered investment adviser (not stock broker), manage money for pension funds and private investors. I have committed $3 million of my own funds for immediate investment in this proposal without any additional evidence of success.

As a snowbird, second-home resident of Siesta Key, I don't have a chance to read the local paper when I'm out of town.

I was informed, via fax, that five of the eight respondents have been short listed and will be making a presentation to the city. None of which I believed has given the city of Sarasota "affordable housing" - an item the city requested in its RFP.

I personally thought that the site was ideal as a housing anchor.

With limited rentals in the immediate area, this was an ideal location to seed the area for the future rebirth of Sarasota and a continuing success as a community - hopefully before the 2020 due date.

Our team consists of long-term, hands on real estate operators who normally buy and renovate apartment buildings - a very costly venture.

We have chosen the best architect, engineers and builder in the Sarasota/Naples area, people with experience and credibility. Besides experience, we bring dollars with no gimmicks.

Since the cost to construct will be almost the same for all of us, we chose to take our profit over the life of the 30- to 40-year mortgage and make the units affordable, rather than saleable, and take our money slowly rather than make an upfront killing.

Operating costs were the only mechanism we had left to control to lease the property at affordable prices.

Since real estate taxes are the largest component of a mortgage or the largest single operating expense in an apartment building, eliminating that component allows the owner to lower his prices and helps attract and retain a resident. Especially since apartments for rent are available out by Interstate 75.

The tax abatement doesn't go into the owners' pocket, it reduces the rents that have to be charged to a new resident, otherwise the resident will stay out by I-75 and not venture into downtown.

Our goal was to meet the city's stated commitment to affordable housing - even if it meant giving up an immediate profit, and still satisfy the parking requirements above the needs of the city (300) vs. the "excess" parking of 258 spaces we have provided.

I'm just sorry we didn't have the opportunity to help!

Rocco Santomenno

President of Gold Ring Investments Inc., an investment adviser in Fair Lawn, N.J., and a partner in an unnamed proposal to build an 146-unit apartment complex, 30,000 square feet of retail space and 704-space parking structure.

That proposal was rejected by the city in its most recent short list.

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