The seeking of Community Development Block Grant funds to aid the planned 56-unit Edgewood Place apartment complex in Mount Airy has hit a wall.

“Our grant application was not successful,” city Community Development Coordinator Martin Collins said Friday of the municipality’s attempt to receive $250,000 in CDBG funds. The money was targeted for infrastructure work at the site of the apartments on Edgewood Drive near Walmart, such as streets, sewer lines and sidewalks.

However, it was not immediately known how the denial of the grant might affect the development with a price tag of $7.4 million, which earlier qualified for tax credits that had been deemed vital for the project.

“I hope it will go forward,” Collins said of the plan that would provide much-needed housing for working families and others. “I haven’t heard that it won’t.”

Craig Stone, the president of Wynnefield Properties — a Jamestown-based firm seeking to develop the 42 two-bedroom and 14 three-bedroom units — could not be reached for comment Friday.

In September, Stone had said the project was ready to proceed toward the construction stage due to the approval of $450,379 in federal housing credits and a $315,000 Rental Production Program (RPP) loan.

That approval from the North Carolina Housing Finance Agency was a critical factor, with an initial rejection of the tax credits by that agency in 2011 causing the development to be delayed one year until they could be sought again.

Stone said in September that meetings with architects would be the next step for Wynnefield Properties and did not mention any role the denial of CDBG funds might play in this regard.

The Mount Airy Board of Commissioners agreed to apply for those funds in April after a public hearing in which community members cited the need for new rental housing in the city. Along with not being plentiful, much of the existing housing stock is old and ill-maintained, hearing speakers said.

There are no plans to designate any municipal funds to pay for the work the CDBG grant would have.

“I don’t know that we can do anything,” Collins said. “This was, I guess, the best way the city could try to help,” he added of applying for the non-local funding.

While specific reasons weren’t offered for the grant application’s rejection, a constant obstacle in such cases is a large number of takers vying for a limited pool of money.

“The competition in this economy is really intense,” said Collins, who has reviewed the 21 projects that were approved for CDBG funds. “It appears the grants that were awarded were worthy.”

Collins added, “We gave it our best shot.”

Reach Tom Joyce at 719-1924 or tjoyce@heartlandpublications.com.