A rendering of the proposed Sunset Lofts workforce housing development. Photo courtesy Sunset Lofts LLC.
By Tim Perry | Red Rock News
The city of Sedona’s partnership with the MK Company of Scottsdale to construct workforce housing on a vacant parcel located at 220 Sunset Drive is still lingering below the horizon, but the developers are hopeful that Sunset Lofts will finally begin to rise this fall after the remaining permitting and financing details are worked out.
The city, on the other hand, may reconsider its commitment or financial contribution to the project in the coming weeks.
Project Evolution
Sunset Lofts LLC, a subsidiary of the MK Company, submitted a letter of intent to construct a 46-unit affordable housing complex on the 2.22-acre parcel on July 7, 2021. The city and Sunset Lofts subsequently entered into a development agreement for the property on July 22.
To facilitate construction, the city of Sedona agreed to extend the developers a 50-year, $4.2-million loan. In exchange, the developers will pay the city 1% of the outstanding balance of the loan annually, which will not be counted towards reduction of the principal, plus 50% of the project’s annual net operating cash flow, which will decrease the principal amount of the loan.
According to the development agreement, the developers were also seeking approximately $8.4 million in U.S. Department of Housing & Urban Development funding to finance the project. The agreement stated that construction would commence at the time of funding of the bank loan after permits had been obtained and was expected to take 14 months.
