Red Stone Tax Exempt Funding Provides $12,100,000 in Tax Exempt Financing to Preserve Section 8 Property in Philadelphia, PA
November 27, 2012
NEW YORK, N.Y. - Red Stone Tax Exempt Funding (“Red Stone”) announced that it recently closed the following tax-exempt bond transaction through its Direct Bond Purchase Program:
Red Stone structured and acquired $12.1 million of tax-exempt bonds issued by the Philadelphia Authority for Industrial Development. The proceeds of Red Stone’s acquisition will provide renovation and permanent mortgage capital for Beckett Gardens (the “Property”), a 132 unit Section 8-assisted property in Philadelphia, PA. The property was acquired by and being rehabilitated by an affiliate of SA+A Development (“SA+A”), a national affordable housing developer specializing in urban preservation transactions. Stratford Capital will also invest approximately $6 million in Beckett Gardens through its sponsorship of a Low Income Housing Tax Credit (LIHTC) limited partnership.
The Bond and LIHTC Equity proceeds will go towards a substantial rehabilitation of the Property, including the addition of amenities that will improve the quality of life in the community. Originally built in 1968, the Property’s systems had reached the end of their useful life and a majority of the units had original kitchens and baths. In addition to spending approximately $50,000 per unit towards significant renovations, SA+A will also construct a new 8,500 square foot community center on site for the Tenants. The new community center will support a variety of activities including job readiness training, after-school programs and computer training.
“This was a great opportunity to preserve affordable housing. If the Property wasn’t preserved under the tax credit program it likely would have left the Section 8 subsidy program and converted to market rate or student housing for the nearby Temple University,” said Cody Langeness, Managing Director with Red Stone Partners. Langeness also noted that, “Beckett Gardens will operate under a renewed 20-Year HAP Contract providing rental assistance on 100% of the units and there is a waitlist for prospective tenants about four times the number of units at the Property.” Langeness summarized that, “For Red Stone this transaction combined an outstanding credit with dramatic upgrades for the tenants and the neighborhood.”
Since 1976, SA+A has been working to rebuild neighborhoods and urban centers through many different structures. Ernst Valery, Principal of SA+A explains “Our corporate and individual mission is to go beyond bricks and mortar to instill strong social impact and equity that ensures a real, measurable benefit to the communities and people we serve.”
David Alexander, Principal of SA+A Development added “We were very pleased that we’re able to incorporate all the needed renovation work as well as construct a new community center with a 4% tax credit bond execution. I was extremely pleased with how Red Stone and the rest of our financing team performed and helped us see our vision through to execution.”