2013 HTC Development that Best Demonstrates Financial Innovation

Winner

Palmer Park Square

Developer: Shelborne Development Company
Owner: Palmer Park Square LDHA LP
Location: Palmer Park district of Detroit, Mich.

The Novogradac Journal of Tax Credits is pleased to award the 2013 Historic Tax Credit Development that Best Demonstrates Financial Innovation to Palmer Park Square LDHA LP of Detroit, Mich. In a time of economic instability, in an area where investors were few and far between, this partnership combined seven different financing sources to transform six vacant, historic buildings into 202 apartment units. The rehabilitation of Palmer Park Square demonstrated creative resourcefulness by examining the development from all angles to procure various incentives from all levels of government. At the federal level, the property received $4 million in historic tax credits, $1.5 million in annual low-income housing tax credits and $3 million from the U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships program. Because of the property’s highly blighted status and Detroit’s long-standing history of heavy industry activity, the development received $1.9 million in brownfield funds. Palmer Park Square also received $1.35 million in state historic tax credits and $4 million in local funding from the city of Detroit.

Using seven different funding sources and timing the flow of the funds into the development posed many challenges. Palmer Park Square LDHA LP was tasked with managing and completing the large amount of paperwork that resulted from assembling such a complex funding package. Timing the flow of funds into the development at the proper time required collaboration and coordination from the development team. In addition to demonstrating financial innovation, this grand-scale rehabilitation of six buildings in the historic, National Register-listed Palmer Park District ensures that the cultural, historical and architectural spirit of Detroit will remain preserved for future generations. Palmer Park Square currently offers affordable and market-rate rental housing.

Congratulations to Palmer Park Square LDHA LP for employing the creative solutions to overcome financial obstacles in rebuilding an important part of the city of Detroit.

Honorable Mention

Capitol Square Apartments

Developer: Housing Corporation of Arlington
Owner: HCA Capitol Square Apartments LLC
Location: Arlington, Mass.

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The honorable mention goes to HCA Capitol Square Apartments LLC of Arlington, Mass., for rehabilitating three circa-1912 apartment buildings into affordable housing in East Arlington, a Boston suburb. The Capitol Square Apartments development demonstrated HCA’s commitment to financial innovation by combining a wide variety of funding sources during the pre-development and permanent project stages, as well as in the post-development operating stage. The Capitol Square Apartments development was financed with federal and state historic tax credits, 4 percent low-income housing tax credits, tax-exempt bonds, numerous grants and contributions from local residents.

The completion of the Capitol Square Apartments opened the door for HCA to continue developing affordable housing in East Arlington. Congratulations to HCA Capitol Square Apartments for employing creative financial solutions and paving the way for further development in the community of East Arlington.

“This I found to be just a great use of an old building that will give the new tenants pride in their living environment that will hopefully spill out into the rest of their lives.” – John Tess

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