Related Cos. Receives $50M Refi for Affordable MA Asset
- Jan 18, 2019
MassHousing has closed on a total of $50 million in financing on behalf of Related Cos. for the renovation of Chestnut Park Apartments in downtown Springfield, Mass. The refinancing will enable Related to preserve the affordability of all 489 units in the community, while also making capital improvements. As part of the deal, the owner is set to create 77 workforce housing units affordable to moderate-income households.
Located at 68 Harrison Ave., the 33-story Chestnut Park Apartments provides easy access to interstates 91 and 291. The property is within walking distance of MassMutual Center and MGM Springfield Casino. Built in the 1970s under the HUD 236 financing program, the development includes 207 one-, 264 two- and 18 three-bedroom apartments as well as 19,000 square feet of commercial space.
Related Cos. intends to perform extensive improvements at the property. Among the upgrades planned are unit, streetscape, building envelope and systems renovations, including the replacement of HVAC systems, windows and elevators. Moreover, the company plans to refurbish communal spaces and building amenities, which—according to Yardi Matrix data—include:
- a community room
- a swimming pool
- laundry facilities
- 978 parking spaces
Following the renovation process, 412 units will remain affordable to households earning at or below 60 percent of the area’s median income, with 241 of those receiving additional support through Section 8. The remaining 77 units will become workforce housing units, affordable to households earning at or below 85 percent of the area’s median income, which is $73,900 for a family of four. The modernization project will bring 10 units to ADA standards for hearing-impaired and 25 units for mobility-impaired households.
ETC Cos. will be the contractor for all the modernization works, The Architectural Team will serve as architect of the project and Related Management Co. will be the management agent.
Joint financing efforts
MassHousing provided $45 million in tax-exempt financing through the agency’s Conduit Loan Program, in partnership with Wells Fargo, the entity that will act as the project’s commercial construction and permanent lender. MassHousing additionally provided $5 million through the agency’s $100 million Workforce Housing Initiative.
The MassHousing funds and an allocation of federal and state Low-Income Housing Tax Credits by the Massachusetts Department of Housing and Community Development (DHCD) generated $42.4 million in equity financing for the project. The transaction is also benefitting from $2 million in direct support from DHCD, $500,000 from the City of Springfield, a $2.8 million deferred developer fee and $2 million from the Affordable Housing Trust Fund.
Chestnut Park is part of the Baker-Polito Administration’s goal of creating up to 1,000 new workforce housing units affordable to middle-income households through the MassHousing Workforce Housing Initiative. Since 2016, MassHousing has committed or closed workforce housing financing for 29 projects, including $17.1 million for the development of a 102-unit affordable housing community in Lawrence, Mass.
Images courtesy of Yardi Matrix