Two Spokane-based nonprofits say they've reduced the number of apartment units they plan to develop initially in the Appleway Court senior housing project, although they hope to add a second phase to the development eventually.

The nonprofits, Spokane United Methodist Homes and Community Frameworks, now are planning to develop a $7.2 million, 38-unit, low-income apartment building in the first part of the project, says Christopher Wojtowitcz, Community Frameworks' associate housing developer.

The three-story, L-shaped structure would have 37 one-bedroom apartment units with an average of 500 square feet of floor space and one larger two-bedroom unit for the apartment manager.

The original plan included 51 units and a total development cost of $9 million, but the developers scaled back the project when they decided not to pursue funding through the sale of low-income housing tax credits, Wojtowitcz says.

Investors—usually corporations—that buy low-income housing tax credits through a competitive bidding process can deduct the value of those credits directly from the amount of income tax they owe.

Due to the recession, however, fewer investors are positioned to take advantage of such tax incentives, Wojtowitcz says, adding, "The tax-credit market isn't healthy."

Spokane United Methodist Homes, which does business as Rockwood Retirement Communities, bought the project site at the southeast corner of Appleway Boulevard and Farr Road last year and has teamed up on the Appleway Court project with Community Frameworks because of its experience in developing low-income housing.

The new development plan leaves room for a possible second phase just east of the first project that would give Appleway Court more units overall than was envisioned originally, says Alan Curryer, Rockwood Retirement Communities' president and CEO.

"It made us look more creatively at the project, and we saw an opportunity for two phases," Curryer says of the change in plans.

Although the second phase is just in the concept stage, it would involve construction of a 38-unit structure that would be roughly a mirror image of the first-phase project, he says. No costs or construction dates have been estimated for the second project.

Zeck Butler Architects PS, of Spokane, designed the initial project. A contractor hasn't been selected for it yet.

Construction could start this summer and should take about 10 months to complete, Curryer says.

In January, the U.S. Department of Housing and Urban Development awarded the developers $4.3 million to construct 38 living units for low-income tenants over the age of 62.

HUD also awarded the project a three-year rent subsidy totaling $420,000 that's intended to ensure that no tenants pay more than 30 percent of their income for rent.

The developers also are seeking a $2.4 million grant for the project from the Washington state Housing Trust Fund. That request survived an initial round of the selection process, Curryer says.

"There were more requests than there's money for," he says. "We made it to stage 2, so that's really a good sign."

State Housing Trust Fund grants will be awarded sometime this month, Curryer says.

Another $500,000 is being requested through a Spokane County affordable housing program, he says.

The project will be Rockwood Retirement Communities' first endeavor in low-income housing. Its other senior-living facilities are Rockwood South, at 2903 E. 25th on the South Hill, and Rockwood at Hawthorne, at 101 E. Hawthorne, just north of the Spokane city limits.

Community Frameworks has had a part in developing or preserving more than 500 low-income rental units and constructing more than 150 single-family homes and condominium units for first-time home buyers in the Pacific Northwest, its Web site says.