Whittier Street Apartments Choice Neighborhoods Initiative Rodger - - PowerPoint PPT Presentation

Whittier Street Apartments

Choice Neighborhoods Initiative

NH&RA Annual Meeting Rodger Brown, Managing Director of Real Estate Development, Preservation of Affordable Housing (POAH)

NH&RA Annual Meeting

• 200 unit demolition
• 350+ unit new

construction

• Mixed-use & mixed-

income

• Transit Oriented

Development

Whittier Street Apartments

The Redevelopment

Whittier Street Apartments

LIHTC Development Challenge

NH&RA Annual Meeting

• Fundamental Problem – Unused LIHTC Basis
• Two key drivers of unused basis
• High Construction and development

costs

• Finite nature of 9% LIHTC resource

Whittier Street Apartments

4% / 9% Structure

NH&RA Annual Meeting

• Largely avoids unused LIHTC basis
• Can be used in fee simple or

leasehold transactions

• Requires two standalone real

estate transactions

Whittier Street Apartments

Development Phasing

Whittier Street Apartments

Whittier Housing Program

NH&RA Annual Meeting

Whittier Street Apartments

Sources of Funds

NH&RA Annual Meeting

5 10 15

1st Mortgage - Tax Exempt 1st Mortgage - Taxable 4% LIHTC Equity 9% LIHTC Equity MA State LIHTC Equity MHFA Workforce Funds City of Boston Funds DHCD Soft Money Choice Neighborhoods Funds Deferred Developer Fee GP Equity

Millions

$200 $2.6 M $4.1 M $1.3 M $2.6 M $1.5 M $5.8 M $14.5 M $12.2 M $5.3 M $9.3 M

Maximizes the awarded 9% allocation - $1.5 million annually Produces an additional $1.11 million in annual 4% LIHTC allocation Includes $1.54 million in annual (5 year) Massachusetts State LIHTC allocation

Whittier Street Apartments

Uses of Funds

NH&RA Annual Meeting Acquisition $1.5 M Contingency $2.1 M Soft Costs $5.8 M Reserves $950,000

• Dev. Fee (Paid) $4.3 M

Dev Fee (Deferred) $2.6 M Construction $42 M

Whittier Street Apartments

LIHTC Unit Sizing

NH&RA Annual Meeting

• Select which buildings will have multiple
• wners (via condo agreement)
• Identify which units belong to which condo
• Calculate 9% LIHTC basis…if too high (or low)

remove (or add) a unit…

• Recalculate basis…if too high (or low) remove

(or add) a unit…etc.

Whittier Street Apartments

Challenges

NH&RA Annual Meeting Most important:

• Must avoid “subsidy taint” between transactions

(specifically tax exempt bond proceeds) Less critical, but challenging:

• Multiple sets of closing documents
• Additional transaction costs
• Added general complexity

Unforeseen challenges:

• Massachusetts condominium laws
• “Shed condo” structure