Baxter Lofts in Harlingen sets low-income rents

Steve Sorrels measures twice and cuts once in what is going to be a common room on the ground floor of the Baxter Building. The large windows faces A Street in the downtown district of Harlingen. (Rick Kelley | Valley Morning Star)

HARLINGEN — Lynn Sanger’s busy taking calls from residents who want to live in the city’s first high-rise development — even though she won’t start taking their applications for about a month.

“There’s a lot of interest,” a housing management specialist with Wilhoit Properties, said yesterday. “My phone is ringing off the hook.”

At Baxter Lofts, all 24 units — described as “luxury” apartments — will charge rents aimed at low-income residents.

That’s not what MRE Capital said when the developer launched the project in late 2015.

At that time, MRE Capital, a Kansas City, Kan., developer, said 19 of the apartment development’s 24 units would rent as affordable housing while the other six units would be priced at market rates.

Because the Texas Department of Housing and Community Affairs awarded the developer $3.3 million in federal tax credits to help fund the project’s construction, MRE Capital must rent the units as affordable housing following federal guidelines.

“I think it’s going to rent really fast,” Sanger said, noting she plans to start taking applications March 1. “People are really looking forward to affordable housing. It’s a wonderful thing to bring to the community.”

As a result of federal guidelines, there are several factors taken into account when determining applicants’ qualifications.

Depending on income and other factors, Baxter Lofts will rent its one-bedroom apartments from $239 to $600 while its two-bedroom apartments will rent from $275 to $800.

Individuals and families with incomes ranging from $11,880 to $33,900 might qualify to rent units.

Two-bedroom apartments will include households with up to four tenants.

Sanger said the company, which will manage the development for MRE, will conduct background checks to screen applicants.

“I think there’s a little bit of apprehension,” Sanger, who manages other renovated developments for MRE, said. “Our screening process is very thorough — criminal checks, credit checks.”

They’re watching

Downtown property owners are counting on the company to rent to good neighbors.

“At this point I’m not concerned about tenants causing problems. They have jobs — they just don’t make that much,” Bill DeBrooke, the owner of several downtown buildings who launched the area’s revitalization drive in the late 1980s, said Monday.

“The concept behind affordable housing is to get a mix of demographics living close together,” DeBrooke said. “Communities are made up of all income levels and demographics. I think we’re going to get a cross section of people from the community.”

Slightly behind

Sanger said the project has fallen behind schedule.

When MRE broke ground on the project last July, City Manager Dan Serna expected construction to be completed by April or May.

“The property is a lot further out than we anticipated,” Sanger said. “It’s running a little bit behind. They’re moving fast.”

Now, Sanger said she expects to begin taking applications by about March 1, with the move-in date set for about June 1.

Baxter Lofts, described as a “luxury” development, will feature an outdoor picnic area, a fitness center and a community room with computer work stations.

How we got here

As part of an agreement, the Harlingen Community Improvement Board sold the nine-story Baxter Building to MRE Capital for $250,000 on the condition the developer invest $4.5 million to restore the 91-year-old former office building to its original condition.

The deal was contingent on the developer’s success in landing the tax credits.

In 2016, MRE’s first attempt failed.

After a second setback in 2017, the developer clinched the tax credits upon its appeal to the state.

Since the 1960s, the building had fallen into disrepair, turning into the city’s tallest eyesore that loomed over downtown.

For about 30 years, the city searched for ways to renovate the historic building.

Since he won election to the mayor’s post in 2007, Mayor Chris Boswell made the building’s renovation one of his goals.

Then in late 2015, the city entered into an agreement with MRE Capital to renovate the former flop house, blamed for standing in the way of the downtown area’s revitalization.

Leaders hail project

Now, Boswell believes the building’s renovation will serve as the crowning touch in the drive to revitalize the downtown area.

“I want to thank the board for having the vision for this project,” Boswell told the Community Improvement Board in a meeting last week. “What a great value.”

City Commissioner Tudor Uhlhorn said the renovation project is already helping to change the face of the downtown area.

“It looks fantastic when you’re driving by A Street,” Uhlhorn said, referring to the building’s location at 106 S. A St.

Commissioner Victor Leal praised the developer’s work.

“ It’s incredible what they’ve been doing,” Leal said. “They’ve put a lot of effort into this building. It’s cool. I’m very impressed.”