Date of Release: 12/30/2011
View pictures here!
December 30, 2011- ST. LOUIS, MO- Castle Park is a 209-unit multifamily and elderly Project Based Section 8 property located on Castle Park Drive in Normandy, MO. The property provides an essential housing resource in St. Louis, but was in great need of repair in order to continue operations. Community Housing Concepts, Inc., a Denver-based nonprofit, acquired the property in November of 2007 and hired Steele Properties as the developer. The property was purchased as part of a pool of seven affordable properties. At the time of purchase, Steele and CHC recognized the significant capital needs of the property, which is why they financed the purchase with a short-term bridge loan in anticipation of an allocation of Low Income Housing Tax Credits that would finance a needed renovation.
Unfortunately, given a) the large scope of work required, b) the conditions of the 2008 market (credit pricing had not recovered and there was virtually no appetite for bond or 4% tax credit deals), and c) the historic nature of the Castle (original slate tile roofs, copper gutters and downspouts, etc.), conventional housing funding sources proved inadequate to meet Castle Park’s needs. Steele and CHC explored every financing option available, and had to be persistent to secure a winning combination of sources that would ultimately allow the project to move forward. From the inability to combine state and federal housing funding, to the unwillingness of investors to support a sandwich lease, the developer faced many road blocks along the way bringing the project back to the drawing board. But Steele left no stone unturned to ensure successful preservation of this important historic housing resource, and ultimately triumphed with creativity and flexibility.
“Talk about a test of will,” says Stuart Heller, a Steele Properties Principal. “We knew that preservation of this property was important, and the eventual success is truly a testament to our perseverance and our commitment to ensure that residents live in a building that not only meets their physical needs, but that they can be proud to call ‘home.’”
“It is through CHC’s combined years of experience and important partnership with Steele Properties that we have successfully completed the Castle Park renovation,” says Hud Karshmer, President of CHC. “When it came to finding a viable solution to fund the needed improvements, we left no stone unturned. And when there weren’t any stones left, we created more by utilizing sources that were, at the time, unknown to us.”
The ultimate financing structure includes: Federal 4% Low Income Housing Tax Credit equity; Federal Historic Credit equity; State Historic Tax Credit equity; private activity bond financing; transfer of second and third mortgages via HUD’s mark-to-market program; deferred developer fee; American Recovery and Reinvestment Act gap funding sources: Tax Credit Assistance Program and Tax Credit Replacement funds; County of St. Louis HOME funds; city and county property tax abatement; Ameren Missouri funded energy efficiency upgrades; and Section 8 Housing Assistance Payments.
“The marriage of so many sources is incredibly challenging to navigate,” says Chad Asarch, another Steele Properties Principal. “For example, to utilize both federal historic and housing tax credits, we had to adjust the housing credits to accommodate for historic. These types of creative solutions kept us going when others would have thrown in the towel.”
True to its name, Castle Park is a one-of-a-kind castle-like structure. The building features a brick exterior with several towers and wings which give it the appearance of a medieval castle. Castle Park was placed on the National Register of Historic Places on April 12, 1982 (Reference number 82004722) for its Victorian origin and Renaissance Revival and Chateauesque Architectural styles, as well as for its social history as an early mental institution. Built in 1891 to house the St. Vincent’s Sanitarium for persons with nervous and mental diseases, and later termed St. Vincent’s Institution for the Insane, the property housed in-patients until 1982 when the property was sold and converted to apartments. The Castle had not been updated again until CHC acquired the property in 2007 and hired Steele Properties as the developer for the resulting $27.3 million historic redevelopment.
A challenge faced in pursuing the recent renovation involved the historic preservation to which the owner and developer were committed. The building still contains original Italian marble floors, French tile slate roof, and several original fixtures including copper gutters. Also, the extent of the unit renovations required current residents to vacate their unit. In order to impact residents as little as possible, the project required detailed construction management and spot on timing to ensure that residents only needed to relocate once. Residents from unfinished units were relocated to finished units, where they stayed permanently with no need to move a second time.
The renovation has first and foremost repaired the structural foundation of the building to ensure longevity of its operations. The exterior historic rehabilitation included new windows, masonry repair, foundation repair, and copper metal repair, including replacement of coping metals, gutters, and downspouts. The new state-of-the-art downspouts are designed to prevent water leakage, which will preserve the repaired brick exterior that had been damaged by the old leaking downspouts. Interior construction included a complete rehabilitation of apartment interiors. All apartments received new kitchens and bathrooms including new fixtures, cabinets, flooring, and energy efficient appliances. Additional interior improvements include new water heaters, furnaces, doors, drywall texture, and paint.
“Castle Park is a very unique and important landmark,” says Karshmer. “Not only did the rehabilitation restore this historic building, it also preserved 209 affordable housing units in an area whose demographics show great need for affordable housing.”
The latest census information for Normandy, MO shows that of the 5,008 individuals living within city limits, 37.4% are below the poverty line. The affordable units at Castle Park Apartments provide a home to a significant number of these individuals and along with amenities and services- from a connected business center, fitness center, commercial grade playground and significant outdoor recreation and gathering space- provide important resources for residents to work towards improving their social and financial status.
Community Housing Concepts, Inc. (CHC) a nationally operating 501(c)(3) organization, is the owner of Delhaven Manor. Founded in 2005, the organization has been responsible for the investment of approximately $150 million in multifamily and senior affordable housing units, including over $50 million in rehabilitation efforts. CHC , either directly or through its subsidiaries, owns fifteen affordable communities around the country totaling almost 1,600 units. Of those properties, thirteen have undergone (or are undergoing) complete rehabilitations. The resulting improvements result in better lives for the residents of CHC properties, who have exclaimed time and again how happy and proud they are to call Community Housing Concepts “home.”
Monroe Group Ltd. is the property management company for Delhaven Manor Apartments. Founded almost 30 years ago, Monroe Group currently manages a portfolio of 32 multifamily properties totaling nearly 2,500 units.
Steele Properties LLC is a national real estate investment firm specializing in the acquisition, rehabilitation, and new construction of affordable multifamily rental properties. The firm’s mission is to preserve, improve, and increase affordable housing opportunities for vulnerable communities across the country. Steele has successfully completed over $250 million in acquisitions, sales and development activity involving 30 properties and over 2,700 units, including eighteen tax credit projects.
For More Information Contact:
Community Relations Manager, Monroe Group Ltd.