Somerset and NHT/Enterprise Form JV to Purchase and Redevelop DC Affordable Housing Community
- Dec 18, 2013
By Joshua Ayers, Senior Editor
Washington, D.C.—Somerset Development Company (Somerset) and the National Housing Trust-Enterprise Preservation Corporation (NHT/Enterprise) have entered into a joint venture for the purchase of the 223-unit Channel Square Apartments located at 325 P Street SW in Washington, D.C. Jonathan Rose Companies (JRCo) and the Rose Green Cities Fund—JRCo’s investment fund with Citi Community Capital—have invested in the joint venture that will help preserve and expand the affordable housing community located across the street from Fort McNair and less than one mile from Nationals Stadium at the Navy Yard.
“Our joint venture with NHT/Enterprise, along with Rose Green Cities Fund as the investor, makes great sense,” says Jim Campbell, principal of Somerset. “We all focus on affordable housing preservation and working with tenants. We were seeking partners who share our mission to strengthen local communities. NHT/Enterprise and Rose are outstanding for their commitment to residents and innovative, transformational projects, and we share a strong alignment.”
Citi provided a first mortgage loan in the amount of $24.6 million and an application for supplementary financing has been submitted to the D.C. Department of Housing and Community Development.
“Somerset and NHT/Enterprise’s shared mission to preserve affordability in neighborhoods like ours made them perfect partners for the Channel Square tenants,” says Carolyn Mitchell, president of the 325 P Street S.W. Tenants’ Association. “We are excited to be working with these two great organizations to ensure that our residents can continue to call Southwest home for years to come.”
The community is situated on 3.95 acres and was purchased in collaboration with Mitchell’s organization through the Tenant Opportunity to Purchase Act, which allows for District tenants to purchase their building if it is offered for sale by the owner. The tenant’s association received assistance from Housing Counseling Services and bro-bono counsel from Arnold & Porter LLP along with Skadden, Arps, Slate, Meagher & Flom LLP, in choosing Somerset and NHT/Enterprise as the developer/owner by way of a bidding process last February.
“We were so pleased to have the opportunity to work with Somerset, NHT/Enterprise and the tenants to acquire Channel Square Apartments,” says Jonathan F.P. Rose, president and founder of Jonathan Rose Companies. “The preservation and expansion of affordable housing, and the potential to create a thriving and sustainable mixed-income community with great access to transit and amenities, is very much in keeping with our mission. It is also the investment objective of the Rose Green Cities Fund, the investment vehicle we created with Citi Community Capital in 2012.”
The development team is working closely with the tenant’s association and has plans to create a development plan that will assimilate innovative and sustainable design principles while recognizing residents’ health and wellness needs and the ever-evolving characteristics of the neighborhood.
“Everyone should have the opportunity to live in a quality community they’re proud to call home,” says Michael Bodaken, president of NHT/Enterprise. “Preserving housing like Channel Square is essential for not only maintaining but also stabilizing diverse, vibrant, and mixed-income communities that include easy access to public transportation, jobs and other opportunities for low-income families.”