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January 14, 2014 - Daily Business Review
Miami Affordable Housing Projects Closer To Development
By Eleazar David Melendez
After years of setbacks that have pushed back the timeline on development, several affordable housing projects in one of Miami's most blighted corners are closer to becoming a reality, a developer of one project and others involved in the transactions told the Daily Business Review.
Four new construction projects, which combined would add more than 600 units of affordable rental housing to the Overtown neighborhood of Miami's urban core, are in advanced stages of securing construction funding and are likely to move forward with development, according to the chief executive of the Community Redevelopment Agency for the area.
"If I had to guess, at this time, we'll close the financing in the first quarter of 2014," said Matthew Rieger, president and CEO of developer Housing Trust Group, which is building one of the projects. "We will put a shovel in the ground the day after we close."
Housing Trust's project, Courtside Family Apartments, is looking to build 84 units of affordable housing for families between NW 14th and NW 16th Streets at the intersection of NW Third Avenue. The developer expects costs to amount to $20 million for that first phase of development. A second, $30 million phase is expected to add 114 units of housing for seniors to the same area. A third, $20 million development will provide 80 units of housing for to-be-determined special needs population—it could be housing for the homeless or disabled veterans, for example.
Housing Trust Group's Courtside, which came together through a partnership with the developer, former Miami Heat star Alonzo Mourning's namesake charitable foundation, and the local CRA, is not even the project furthest along in development.
That distinction belongs to a development baptized Lyric Place, which is expected to add 164 units of affordable housing on NW Second Avenue between NW Eighth and 10th Streets across from the historic Lyric Theatre, according to the executive director of the Overtown CRA, which also covers parts of southeast Overtown and Park West.
A third project, Island Living, is expected to add 75 units of affordable housing to the neighborhood at 1201 NW Third Ave. St. John Overtown Plaza at Northwest Third Avenue and 13th Street will add 90 units of affordable housing.
Several of the projects include a retail and commercial space component, a move expected to help create jobs in the area as companies take up those spaces.
"These are areas where we see a need for affordable housing to address slum and blight, so we incentivized developers to come into our area to come in and develop," said Clarence Woods, executive director of the Southeast Overtown Park West CRA.
The CRA is playing a key role in the financing of the developments, negotiating a $60 million bond issue to partly finance the projects to pay for the rehabilitation of other affordable housing units, and retire debt. It's a big step for the CRA, one that will tie up a significant amount of its revenues for years to come.
While the agency expected to close on the financing with Wells Fargo by the end of 2013, it recently extended its own deadline on the matter by six months. The CRA cited unspecified "issues that have to be finalized with Miami-Dade County" as prompting the extension.
It's hardly the only stumbling block that the relatively clustered developments have seen in the past.
As recently as October, a deal was being brokered for competing developers to share in the Lyric Place project, for example.
Rieger, the CEO of developer Housing Trust Group, explained his particular project had essentially seen back and forth momentum since 2007 when his company partnered with the Mourning Family Foundation on a development plan.
The developer then proceeded into the highly competitive process of securing so-called gap financing in the form of affordable housing credits from the state. Courtside was hampered twice in its efforts, first by bad luck at the statewide lottery for credits and then by a rules change that made it less likely to succeed in securing that financing mechanism.
"We don't want to be at the mercy of a lottery at the state level to know if building is going to occur, but these deals just don't work if we don't have gap financing," Rieger said.
At that point, Housing Trust and the Mourning foundation approached the CRA, which in 2012 voted to finance Courtside and the other projects through a bond issue.
Although the bond issue hasn't been officially signed off on, Rieger was optimistic it would go through early this year and expected his project would open in mid- to late-2015.
Allen Furst, treasurer and secretary of the Mourning foundation, also was enthusiastic about the prospects for the Courtside project and emphasized the fact that people involved in it stayed with the project through various complications.
"Over the years, there's a lot of money that has been dropped in this and other communities that has been for naught," he said. "There's been incentives, and different groups have come in and out from time to time. That's not the attitude we have. We really want to see this constructed and get to the finish line. We won't be moving too fast until we can see this through."