Archived News

Turning Haywood’s shuttered hospital into apartments hinges on tax credits

haywoodThe plan to convert the old hospital in Haywood County into low-income apartments isn’t a done deal. It’s contingent on both historic preservation and low-income housing tax credits to make it financially viable.

The two tax credits only recently aligned, however. Two months ago, neither were an option. 

“The time is right to look at making the old hospital more productive. This is a very ripe deal for us,” said David Francis, Haywood County’s special project manager. “This is a ‘sweet spot’ for the project right now.”

State legislators had nixed the historic tax credit in 2014, but have now reinstated it following widespread protest.

Meanwhile, the project didn’t qualify for the low-income housing tax credit until recently either. Rigorous criteria for the low-income housing credit included a stipulation that projects fall within walking distance to a grocery store and pharmacy. The old hospital in Waynesville was just shy of the required one-mile proximity — it is 1.1 miles to the closest grocery store and pharmacy.

 “In a rural area that is an impossible standard to meet,” County Commissioner Mark Swanger said.

Related Items

County officials entreated the state agency that awards the low-income housing credits to make an exception for rural areas.

A couple months ago, the agency agreed. They changed the proximity-to-shopping criteria to a two-mile radius for projects in communities with a population of less than 10,000. Waynesville’s population is just under 10,000, putting the old hospital in the running for the tax credits, Francis explained.

“That’s what turned this thing back on,” said John Stiltner, construction manager for the Landmark Group, the firm undertaking the project.

The reprieve is only temporary, however.

“This is a one year thing and we need to take advantage of it while we can,” County Commissioner Mark Swanger said.

There’s only a limited number of low-income housing tax credits awarded statewide each year, however. And it’s a competitive process.

Last year, more than 200 projects applied for the low-income housing credit, but only 35 were selected.

The old hospital project in Haywood has a good chance, with a perfect score in the initial scoring rubric. But that doesn’t mean it’s a shoe-in. 

If anyone can win the affordable housing tax credits, it’s Landmark, Alexander said. Landmark has an impressive track record of securing the tax credits for its projects.

“They know what they are doing and they will put together a great application for those tax credits,” Alexander said.

Both tax credits have to work in tandem to make the project financially viable.

It’s expensive to gut and renovate an old building — more expensive than it would be to build an apartment complex from the ground up, thus the critical role of historic preservation credits to make it worthwhile.

“You have to have those extra sources to close the gap on the extra cost to restore a building,” explained Ted Alexander with the N.C. Historic Preservation Foundation.

The formula for low-income housing is equally cost prohibitive without tax credits. The Landmark Group, the housing development firm taking on the old hospital, has pegged the total renovation at $7 million.

If the project doesn’t win low-income tax credits, it would be impossible for Landmark to recoup the capital investment while also keeping rent affordable.



School central offices on the rocks

Haywood County Schools will have to find a new home for its central offices if the plan to covert the former hospital into an apartment complex succeeds.

Administrative offices for the school system are still housed in the front portion of the old hospital. Assistant Superintendent Bill Nolte said the school administration has been aware its days there are numbered.

“The commissioners have been very clear to us over the past several years that if they could dispose of that building they were going to,” Nolte said. “So we are not surprised.”

The administration has been methodically looking at options for a new home, but was waiting until eviction was imminent to narrow in on one.

“We have probably looked at a dozen or more sites over the past four years,” Nolte said.

Smokey Mountain News Logo
Go to top
Payment Information


At our inception 20 years ago, we chose to be different. Unlike other news organizations, we made the decision to provide in-depth, regional reporting free to anyone who wanted access to it. We don’t plan to change that model. Support from our readers will help us maintain and strengthen the editorial independence that is crucial to our mission to help make Western North Carolina a better place to call home. If you are able, please support The Smoky Mountain News.

The Smoky Mountain News is a wholly private corporation. Reader contributions support the journalistic mission of SMN to remain independent. Your support of SMN does not constitute a charitable donation. If you have a question about contributing to SMN, please contact us.