Vaughn Bay Construction Inc., of Tacoma, is hoping to buy and upgrades three Spokane-area properties, including the American Legion Building, a downtown landmark at 108 N. Washington.


The Tacoma construction company has formed a partnership, called DPS Legion LP, through which its considering buying the 99-year-old, six-story structure, and converting it into 50 senior-housing units, says Sue Baker, a consultant for the company.


DPS Legion LP has applied for about $514,600 in annual federal low-income housing tax credits from the Washington state Housing Finance Commission for the project. In its application to the state commission, the partnership estimated it would cost about $4.8 million to buy and renovate the building. At this point, however, the project is on a waiting list of projects that likely wont receive any tax credits this year, she says.


To qualify for low-income housing tax credits, a developer must agree to set aside at least 20 percent of a projects units for people with household incomes at or below 50 percent of the Spokane areas median income or at least 40 percent of the projects units for people with household incomes at or below 60 percent of that income level.


The sale of the Legion building still is pending, but its unclear whether the partnership will proceed with its plans since it likely wont receive the housing tax credits this year, Baker says.


Margaret Sevy, director of the state commissions tax-credit division, says the project developer would need to reapply for tax credits next year, since projects on the commissions waiting list dont carry over from one year to the next.


Total Concepts Real Estate Investments LLC, of Spokane, which bought the building in 1995 and had hoped to restore it, deeded the building back to its former owner, Metropolitan Mortgage & Securities Co., of Spokane, last year. Metropolitan Mortgage then transferred it by quitclaim deed to a subsidiary, Western United Life Assurance Co.


Meanwhile, Vaughn Bay Construction also has formed two other Washington partnerships, called PG Conifer LP, through which it hopes to buy and rehabilitate the Conifer Village development at 13129 E. Valleyway in the Spokane Valley, and Ferris View Apartments LP, through which it plans to buy and rehabilitate the Ferris View Apartments at 3141 E. 37th on the South Hill.


PG Conifer has applied for about $395,000 in annual low-income housing tax credits from the state commission, Baker says. If the credits are allocated, they would provide PG Conifer with a total of $3.9 million in housing tax credits over 10 years, she says.


The tax-credit equity, plus an about $2 million loan, should allow the partnership to buy the 64-unit Conifer Village development, update the facility, and build 18 new affordable-housing units at a separate site at 2415 E. Upriver Drive, Baker says. The entire project is expected to cost about $5.5 million, she says.


A public hearing to consider allocating the tax credits for the Legion Building and Conifer Village projects will be held on Thursday, Sept. 14, in Seattle, according to the state commission.


As reported earlier this month, Ferris View Apartments LP also has asked the state housing finance commission to issue $1.45 million in bonds to help it finance the acquisition and rehabilitation of the 58-unit Ferris View apartment complex, which is owned by a Pacific Grove, Calif.-based businessman, W.A. Gough. The commission hasnt decided yet whether to grant the request.