A 121-unit affordable housing apartment building in the Fair Haven neighborhood was recently purchased by out-of-state developers who have begun a major renovation.
City land records show Fairbanks Community Partners LP purchased the building, at 355 Ferry St., New Haven, from RAHF Fairbank Preservation LLC on April 9 for $11.1 million.
KeyBank is financing the purchase and overhaul, providing $37.5 million in capital to Irvine, California-based affordable housing developer Community Preservation Partners (CPP) and Hampstead Development Partners, which has offices in San Diego and Bethesda, Maryland.
The building, a Section 8 property, was built in 1973 and has 106 one-bedroom apartments and 15 two-bedroom apartments, as well as a KeyBank branch on the ground floor. It is currently houses senior apartments.
The developers plan to invest $7 million to renovate the building and will retain all 121 units as affordable housing, John Arthur Richard Fraser, senior development manager for CPP, told New Haven Biz in an email Wednesday morning.
Community Preservation Partners (CPP) had sought a 17-year tax break that caps local taxes at $1,500 per unit per year, with a 3% annual increase. However, the Board of Alders Tax Abatement Committee rejected the request last week.
Among other things, the committee said the request as proposed didn’t take into account the current ground floor commercial space and was not adding to the city’s affordable housing stock since the building was already being used for affordable housing, according to the New Haven Independent.
However, Fraser said in an email that CPP is deepening the affordability and is extending it to more apartments. He said the property previously had 100 of its 121 units restricted to those making no more than 80% of AMI. The other 21 were market rate units with no restrictions.
He said CPP is committed to restricting the apartments to tenants earning no more than 50% and 60% of the area median income (AMI) for at least the next 30 years.
Renovations to the building are underway, he said, and will include a new community room with billiard table, a business center, free WiFi, new in-unit nurse call systems, renovated laundry facilities, new bike racks and a picnic area.
“It’s CPP’s mission to preserve and protect affordable housing across the country,” he said. “We will continue to work with the Board of Alders Tax Abatement Committee with the goal of helping the New Haven community maintain its current affordable housing supply, as well as add 21 more affordable housing units to its current inventory.”
In a news release, Key Bank said the financing comprises $12.5 million of low-income housing tax credit equity, a $6 million equity bridge loan, an approximate $19 million public bond offering and $19 million of Fannie Mae tax-exempt bond collateral.
KeyBank said in the release that the property will have a Housing Assistance Payments (HAP) contract covering 112 units for 20 years, while the other nine units will operate as tax-credit units.
KeyBank Community Development Lending and Investment and KeyBank Real Estate Capital’s Commercial Mortgage Group structured the financing.
CPP, which houses its eastern division in Reston, Virginia, has acquired, developed and rehabilitated more than 11,000 affordable multi-family and senior housing units nationwide, according to the company.
Hampstead Development Partners, CPP’s partner on the project, develops and repositions properties using conventional financing, bond financing, low-income housing tax credits and historic tax credits with state and local participation, its website says.
Contact Natalie Missakian at news@newhavenbiz.com
This story has been updated to add comments from the developer.
