2012 LIHTC Development that Best Demonstrates Financial Innovation

Winner

Toussin Senior Apartments

Developer: Petaluma Ecumenical Properties, aka PEP Housing
Owner: Petaluma Ecumenical Properties, aka PEP Housing
Location: Kentfield, Ca.

Toussin Senior apts

Toussin Sr. Apartments is the first affordable housing project for seniors to be built in Kentfield, CA. The complex consists of 13 one-person households, and is home to retired seniors with annual household incomes ranging from $3,380 to $21,249. To finance the project, developer PEP (Petaluma Ecumenical Properties) Housing utilized state and federal funding leveraged by local funding from partners including the County of Marin, Marin Housing Authority and Marin Community Foundation. The project took seven years from start to finish, features a living roof, transportation services and provides resident service coordinators to assess individual resident needs. Total development costs for the project were just over $5 million.

Judges were impressed by the sheer amount of funding sources used to finance this project, which they felt demonstrated a remarkable amount of ingenuity and patience. PEP Housing utilized 19 layers of funding, more than the amount of total units in the building, and also faced major challenges coordinating these different sources. In particular, the timing of ARRA funds was an unknown element that required PEP Housing to secure two bridge loans from separate sources from the County of Marin. PEP Housing also partnered with Burbank Housing and EAH in order to secure maximum points in California’s 9% LIHTC allocation round in 2009. Two appeals were also necessary to obtain maximum points for site amenities.

Honorable Mention

B1 - La Terraza

Developer: CS Melrose Site B LLC
Owner: CS Melrose Site B LLC
Location: Bronx, N.Y.

B1 - La Terraza

Located in the Bronx, NY, La Terazza overcame a series of complications, including financing the decontamination of the site. La Terraza provides a new grocery store, community room, a beautiful courtyard, bike storage, and laundry facilities to its residents. Additionally, a social service plan was instituted to serve the set aside of 22 units for the formerly homeless, including case management, referral to employment and social resources.

Due to economic conditions of early 2009, basic financing for the project was a particular challenge. La Terraza’s development team was creative in their financing approach in order to satisfy lenders’ risk requirements and to address expensive remediation costs, stemming from the fact that the site formerly housed a dry cleaner. Developers were able to successfully utilize a combination of tax-exempt bonds—a portion of which were variable rate—four subordinated mortgage and equity raised from three tax credit programs, a combination that wowed our judges.

Honorable Mention

Monarch Mills

Developer: Howard County Housing & The Shelter Group
Owner: Howard County Housing
Location: Columbia, Md.

Monarch Mills

A dramatic tenant-in-place redevelopment utilized a complex mixed-finance plan with several layers of project sources, including federal, state, & local funds under a single financial structure. This Columbia, MD property previously contained 100-units of rental housing with a mix of townhomes and garden style apartments built in the 1970s, but gradually suffered from years of deferred maintenance and a severe lack of amenities.

These existing units had rents set well below market rates (50 project based and 50 market rate), with the tenants having no other affordable housing options if the property were to close for an extended period of time. Therefore, it was imperative that the development’s existing residents were not displaced during this reconstruction. This was achieved by utilizing existing vacant units to relocate most families, while staggering demolition and construction in manageable phases.

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