Hunt Capital Partners has facilitated $22.8 million in low-income housing tax credit and historic tax credit equity financing to redevelop Blue Flame Apartments, an adaptive reuse development of the 64-year-old Blue Flame Building in El Paso, Texas.
Once completed, the 18-story property will offer 120 affordable housing apartments and 39,672 square feet of commercial space.
“The funding is being used to complete an adaptive reuse of the building, abating asbestos and lead based paint that existed within the structure, removing the mechanical systems and replacing with modern equipment, and transforming the former office building into brand new fully functional apartment units and community facilities while preserving its historic character and leaving some building space open for office space and/or retail,” William Teschke, Hunt Capital Partners’ director of project management, told MHN.
The high-rise building will benefit also thanks to a 20-year Project Based Rental Agreement contract through the U.S. Department of Housing and Urban Development’s Rental Assistance Demonstration program.
“This project represents another successful public-private partnership, as HCP is helping a long-time partner in HACEP fulfill its mission to provide high quality affordable housing to its residents, while also preserving an historic El Paso structure in the process,” Teschke said.
Built originally in 1954, the building once was home to the headquarters of the El Paso Natural Gas Co., though the past dozen years has seen the space empty.
A chief design feature of the property is a 21-foot steel and Plexiglas flame that sits atop the building, that once lit up in different colors depending on the weather. This feature will be part of the planned renovations and rehabilitation.
Scheduled to be completed by January 2020, the updated Blue Flame Apartments will consist of 120 LIHTC units on 12 floors, available for those households earning 30, 50 and 60 percent of the area median income. Additionally, the property will offer 5 percent of the units to those with special needs.
The top four floors of the building will be utilized for commercial entities.
Building amenities will include storage units in the basement, bike storage, laundry facilities, a community room with common area kitchen, controlled access and off-site garage parking. Services available will include adult education, character building, financial planning and health classes.
The Blue Flame building is in downtown El Paso, which has been experiencing somewhat of a revitalization in recent years and the property is within walking distance of new hotels and restaurants, theaters, museums, green space and a baseball stadium.
“There is a general lack of housing in downtown El Paso, despite recent investment in the neighborhood that is bringing new restaurants, hotels, sporting facilities, and office buildings,” Teschke said. “Further there is significant unmet demand for affordable housing in El Paso, as evidenced by the fact that HACEP’s wait list for housing is thousands of families long.”
The complete cost for Blue Flame comes in at approximately $55.3 million. Hunt Capital Partners arranged the investment of federal LIHTC and historic tax credit equity by Citi through its proprietary investor fund, Hunt Capital Partners Tax Credit Fund 19. It also added $11 million of equity for the Texas state historic tax credits.
Citibank provided a $31 million construction loan and a $3.75 million permanent loan for the project. Paisano Housing Redevelopment Corporation contributed a $17 million loan.
PHRC and Franklin Development Properties Ltd. are co-developing the project, while Sundt Construction Inc. serves as contractor, Alamo Architects Inc. is the project architect and EP Home is the property manager.
It’s been a noteworthy month for the affordable housing space. Just last week, WNC closed its WNC Institutional Tax Credit Fund 45 LP, a $150 million low-income housing tax credit that will be used to develop and renovate more than 1,950 affordable housing units throughout the U.S.