Hunter’s Park mixes uses, financing to create affordable seniors housing

By Susan Ashworth

Hunter's Park in Arlington, Va.

(Affordable Housing Finance, August 2005) Arlington, Va. – An unusual acquisition strategy made it possible to convert an aging strip mall here into a mixed-use property with 74 units of affordable seniors housing.

AHC, Inc., one of the largest affordable housing developers in Northern Virginia, noted the need for a mix of very low, low- and moderate-income housing for seniors after seeing pricey Arlington County lose 4,800 affordable housing units between 2000 and 2002.

The resulting $12.8 million Hunter’s Park project is a four-story building with 74 units of affordable seniors housing and 4,600 square feet of retail. The project is the first mixed-use development in Arlington’s two main commercial revitalization corridors in 20 years. It was completed in January 2005, and it was 81% occupied in July.

Of the 74 units at Hunter’s Park, 45 are designed for seniors earning no more than 60% of the area median income (AMI), 24 are Sec. 8 units with contracts that are renewed annually, and the remaining five are renting to seniors earning no more than 30% of AMI.

“Developing new construction of affordable housing in such an expensive urban market was a huge challenge,” said John Welsh, director of multifamily housing at AHC, adding that the average rent for a one-bedroom apartment in Arlington is $1,152. Rents for the one-bedroom, one-bath apartments here range from $400 to $912 per month.

AHC relied on a number of partners and used some creative financing tricks to bring the project to fruition.

“First, instead of buying the property outright, AHC acquired the stock of the corporation that owned the land and building,” Welsh said. “This was beneficial to the seller, and while risky to AHC, positioned us better among several potential buyers.”

The seller also provided a portion of the financing for the stock purchase, he said.

Second, Welsh said, AHC transferred the real estate from the corporation into a limited partnership in order to participate in the federal low-income housing tax credit (LIHTC) program.

Permanent financing for the project included a $4.8 million, 18-year fixed-rate loan at 6.5% from Enterprise Mortgage Investment; $4.6 million in 9% LIHTC equity syndicated by Hudson Housing Capital; a 30-year, $2 million loan at 6% from Arlington County; a $700,000 grant from the Neighborhood Reinvestment Corp.; and a $700,000, 20-year loan from the developer to the project at a fixed rate of 6%.

Amenities at Hunter’s Park include a rooftop garden terrace, computer rooms, libraries, an outdoor terrace, and indoor and outdoor parking, as well as the retail space on the ground floor. A hair salon is expected to be one of the first retail tenants. The property also offers resident programs that include social and entertainment activities as well as emergency-alert services within each unit.

“For active seniors on limited incomes, Hunter’s Park provides affordable housing right in Arlington,” Welsh said. “For the neighborhood, the development transformed a previously rundown block.” And for Arlington County, he said, the project offers a mixed-use development and adds affordable housing to the county’s dwindling supply. n