CPP Acquires Virginia Affordable Housing Property
Renovations at the Newport News community will ensure that it maintains affordable status.
Community Preservation Partners has acquired City Line Apartments, a 200-unit affordable housing property in Newport News, Va., from an unidentified seller for $30.1 million, with plans to make nearly $11 million in upgrades to the property.
Construction is expected to last for 12 months and be completed in December. CPP, a national investor in affordable housing and community renewal initiatives, said its total development investment is expected to be approximately $57 million. Permanent financing will be provided by Redstone, with PNC Bank investing equity in the project. Paragon Construction is the general contractor, while Ebersoldt + Associates is the project’s architect.
The project’s Land Use Restrictive Agreement will be in place for 30 years. The Housing Assistance Payments contract associated with the property was set to expire in 2025, but the planned renovations will earn the community a new 20-year HAP contract, according to a statement from CPP. The project is part of the Low-Income Housing Tax Credit program.
Located at 155 A Mytilene Drive, the property was built in 1979. The last renovations occurred nearly 20 years ago. The improvements to the 200 apartments are estimated to cost $55,000 per unit and will include new kitchen and bathroom appliances, new vinyl plank flooring and new HVAC units. Shared spaces will be upgraded, with a new computer room and community library. The roof will be replaced and a playground, outdoor fitness center, basketball court, barbeque area and community garden will be added. The project will meet a Home Energy Rating System of 80 after the renovations are completed.
Seth Gellis, senior vice president at CPP, noted that the apartments will continue to be rented to tenants who are at, or under, 50 percent of the Area Median Income. Anand Kannan, CPP president, further highlighted the necessity of affordable housing in Newport News, which has a lack of affordable options for working class and Section 8 housing residents.
This is the third affordable acquisition and renovation program CPP has carried out in the state of Virginia. In recent months, the company has been active in other parts of the country as well. In early March, CPP closed on Coloma Woods, a single-story senior housing development with 29 units in Rancho Cordova, Calif. CPP’s total development investment in that project is expected to be $15.5 million. The company acquired the asset for $9, with renovations set to cost $3.85 million and be completed by the end of the year.
That project will benefit from 9 percent tax credits provided by the California Tax Credit Allocation Committee. Tax credits will be purchased by WNC & Associates, CPP’s parent company, while debt financing will be obtained through Greystone Housing Impact. The Foundation for Affordable Housing will serve as the general partner.
In September, CPP acquired three affordable communities— the $9 million, 38-unit Park Villa in El Cajon, Calif., the $6.5 million, 100-unit Vista Mesa Villa in Grants, N.M., and the $33.3 million, 150-unit Bethany Glen in Glendale, Ariz.—for a total of $48.8 million. Low-income housing tax credits, as well as tax-exempt bonds and loans, were used for all three purchases.
Last summer, CPP acquired two affordable communities in Tennessee—the 100-unit McKenzie Acres in Oak Ridge, Tenn., and the 88-unit Tullahoma Village in Tullahoma, Tenn.—for a combined $10 million. The properties are set aside for residents earning 50 and 60 percent, respectively, of the AMI.