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Innovative Financing Approaches. Restoration Gardens.

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Presentation on theme: "Innovative Financing Approaches. Restoration Gardens."— Presentation transcript:

1 Innovative Financing Approaches

2 Restoration Gardens

3 Restoration Gardens Project 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

4 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

5 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

6 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

7 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

8 Restoration Gardens Financing Content Sources DHCD - NSP$3,500,000 Baltimore City CDBG-R$700,000 HUD – HOPWA$500,000 6 Other Sources$849,485 Total$5,549,485

9 Restoration Gardens Uses Acquisition$134,445 Rehabilitation$3,762,462 Architect & Engineering$341,172 Financing Fees$1,176,214 Reserve$135,172 Total$5,549,485

10 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.

11 Restoration Gardens

12 City Arts

13 City Arts Project Objective  Create affordable artist housing and 11 homes for NEDS  Create a gallery to show work of residents and community  Stimulate activity in community

14 Advantages  Baltimore City owned land at below market price  Strong neighborhood support

15 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

16 City Arts Challenges  LIHTC pricing dropped from $.95 to $.68  Large gap with no sources available  Limited first mortgage capital available in the market

17 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

18 City Arts Sources 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

19 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

20 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.

21 City Arts

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