A pair of projects to benefit homeless veterans in Butler County have hit financial hard times.

That has caused the The Housing and Redevelopment Authority of Butler County to rebid one project and to cancel another one.

The housing authority Thursday put on hold plans to renovate a vacant building at the VA Butler Healthcare campus on New Castle Road in Butler Township.

That project would convert the vacant Building 3 at the VA campus into 18 one-bedroom units for senior homeless veterans 62 and older and their spouses.

Bids on the project are more than twice the authority’s estimated cost, according to John Trant, one of the authority’s two acting executive directors.

The authority last year estimated the renovations would cost about $65 per square foot, totaling about $2.7 million. However, bids came back closer to $150 per square foot for a total cost of about $5 million.

“Certainly that gap is huge,” said board member Jerry Andree.

The authority last year was approved for more than $2 million from the Pennsylvania Housing Finance Agency (PHFA).

The authority also hoped to use about $300,000 from a Federal Home Loan Bank award and $270,000 in county funding to pay for the project.

However, with the bids received, there was a gap of about $2.3 million.

Trant said the projected cost to renovate a building listed by the U.S. Department of Veterans Affairs falls in line with the bids received.

The authority has the potential to reduce the gap through changes in its application, but it was unable to reduce the gap below a $900,000 shortfall.

The authority can return the tax credits and reapply for the total amount needed during the PHFA’s next round of awards, but it would not be able to enter into a lease with the VA until those credits are approved.

The VA had previously indicated it intended to demolish the building before the authority’s interest.

It would be up to the VA to maintain the property until financing is in place.

Trant said the authority must reassess the feasibility of the project, but no decisions were made by the board at its meeting.

“We’re going to have to look at this whole project over again,” he said.

The authority has had similar joint projects with the VA in the past.

The authority opened Deshon Place in 2000 and Deshon Place II in 2009 on the VA campus. Those two buildings offer a combined 30 apartments for any homeless people.

Should funding become available, the authority would sign a 35-year lease with the VA for the two-acre property, with a pair of 20-year options.

Duplex canceled

Another authority project aiming to help veterans has been canceled.

The authority had hoped to partner with the Accessible Dreams charity of Washington County to build a duplex to house homeless disabled veterans on South Chestnut Street in Butler.

However, the authority backed out of the partnership because of concerns about up-front construction loans.

“It’s not beneficial to the authority on a financial standpoint,” Trant said. “So we withdrew from the project.”

The total price of the project was estimated at $355,000. The authority was approved for a construction loan for $180,000 through Northwest Bank, which would have been paid back by Accessible Dreams when the homes were sold.

That remaining gap was eligible to be filled through a Federal Home Loan Bank award.

However, that funding would not be available until after the homes were sold, Trant said.

Once told of the authority’s decision to drop out of the deal, Accessible Dreams asked that it take over site control from the authority so it could proceed with the project.

The charity offered to pay the authority about $30,000 for the land once the homes were sold, according to the authority. The charity then would get funding for the whole project using a construction loan through the authority.

However, the authority said at its meeting that it is not interested that plan.

“The numbers aren’t there,” Andree said.