The Highlands Residential Services Board awarded an estimated $5.4 million contract for the construction of Red Bud Village on Friday.
Red Bud Village is a 20-unit development designed to house homeless populations. Highlands Residential Services Executive Director Dow Harris said the board awarded the contract with the stipulation that it does not exceed the amount of the original bid. Harris said negotiations with the low bidder have led to the price dropping an estimated $61,000.
“I do think we are gonna be able to get the price down and not sacrifice quality or looks or blending in with our Hickory Valley or Magnolia Ridge concept over there,” Harris said. “But I’m not sure how much more. We may be able to get another $100,000 in value engineering.”
Harris said the bids came in slightly higher than expected, leaving a gap of between $700,000 to $1 million. Harris said if the price can’t be negotiated down enough then Highlands Residential would have to get a loan to pay for the remaining cost of the project.
“We don’t have that money right now,” Harris said. “We are very confident that we can make the difference in the gap with a federal home loan bank which Don Alexander is already working on,” Harris said. “We can get up to a million five in federal home loan bank funds. We think the project will score very very well and whatever that gap is once we come to the contract price is going to be X we think that we can close that gap with federal loan home bank.”
Harris said if Highlands Residential Services is unable to get a loan for whatever reason he still feels like the board can move forward with the project.
“The project cash flows very well with the voucher that we are gonna be contracting with the Crossville Housing Authority,” Harris said. “It could carry a reasonable $750,000 to a $1 million debt with the voucher support, so if we go ahead and make a contract award and get the project moving, we are either gonna have no debt through the federal home loan bank or have some debt that I feel very strongly and confidently that the project would cash flow.”
Harris said Highlands Residential received an estimated $4 million in grants and also received $250,000 from the City of Cookeville for the project. Harris said the contractor’s bid is good for 90 days and that if the board waited too long to award the contract the cost of the project could increase as tariffs are looming.
The board approved the filing of documents needed to apply for a loan should the Red Bud Village project need it. The project will be constructed just off Buffalo Valley Road.
In other business, the board approved revisions to the Admission and Continued Occupancy Policy and a policy related to house rules. Harris said the changes were required by the Housing Opportunity and Modernization Act.
The board revisions to apartment leases for Oak Tree Towers and Willow Heights. Harris said new lease changes were posted to the public for 30 days. Harris said the new leases will take effect May 1.
