Innovative Financing Approaches. Restoration Gardens.
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Transcript of Innovative Financing Approaches. Restoration Gardens.
Restoration GardensProject Objective
Provide affordable housing targeted to youth aged 18-24 years
Provide support services to ensure a positive housing experience
Provide furnished apartments Provide safe, inviting environment
with 24 hour support/security
Advantages
Commitment of 100% Section 8 Project Based Vouchers
Vacant former school purchased at tax sale by neighborhood charity that supported the project objectives
Strong political support with award of non-traditional funding sources – HOWPA, State Bond Bill, Baltimore City Bond Bill
Advantages
Two nonprofit organizations committed to the project – Empire Homes a property management
and service company and its parent worked for years on the concept, created strong support and connected to the nonprofit controlling the building
Homes for America a developer/owner
Challenges
Could not access traditional sources (9% LIHTC, Rental Housing Funds)
Plan to use 4% LIHTC and Tax Exempt Bonds collapsed when market collapsed
Needed a primary funding source to supplement the many small grants and awards in a market with few resources
The Solution
Maryland DHCD determined the project qualified for the multi-family/special needs set aside of the Neighborhood Stabilization Program and awarded $3.5 million
Baltimore City filled the remaining gap with supplemental CDBG funds from the housing stimulus
Restoration Gardens Financing ContentSources
DHCD - NSP $3,500,000
Baltimore City CDBG-R $700,000
HUD – HOPWA $500,000
6 Other Sources $849,485
Total $5,549,485
Restoration Gardens UsesAcquisition $134,445
Rehabilitation $3,762,462
Architect & Engineering $341,172
Financing Fees $1,176,214
Reserve $135,172
Total $5,549,485
Is Restoration Gardens Replicable?
We believe in current markets permanent housing for youth is viable. Requires initiative, a member of the team that knows the population and tenacity in seeking out non-traditional funding sources.
City ArtsProject Objective
Create affordable artist housing and 11 homes for NEDS
Create a gallery to show work of residents and community
Stimulate activity in community
Advantages
3 Non-Profit Partners Homes for America – Developer,
Guarantor and Managing Partner Jubilee Baltimore – Strong connections to
artist community and community association
TRF Development Partners – Townhouse developer 8 new homes, rehabilitated existing homes
City Arts Challenges
LIHTC pricing dropped from $.95 to $.68
Large gap with no sources available Limited first mortgage capital
available in the market
The Solution
Federal stimulus provided funds to DHCD to fill the gap (TCAP)
Bank of America stepped up to buy the LIHTC and provide a first mortgage loan
City ArtsSources and Uses
Sources
Tax Credit Equity $9,312,495
TCAP $2,635,000
Bank of America First Loan $1,300,000
MEEHA Energy Loan $135,399
Sources Total $13,382,894
Uses
Acquisition $156,235
Construction $9,395,081
Architect & Engineering $1,097,107
Financing Fees $2,387,583
Reserve $346,888
Uses Total $13,382,894
Community Impact
Stimulated significant development Long vacant building redeveloped to
provide a charter school for the arts Badly deteriorated row housing
demolished by Baltimore City Baltimore City implemented Vacants
to Value program in the neighborhood
Is City Arts Replicable?
City Arts II is in predevelopment now on land acquired from Baltimore City under the Vacants to Value program. The current markets support this type of housing. Because the public purpose is serving artists, strengthening the community, and stimulating development fewer deep subsidies are needed.