Two blighted office buildings have been transformed into affordable housing for seniors in Los Angeles' Chinatown neighborhood with the help of a creative financing package.
Developed by Meta Housing Corp. and Western Community Housing, the new Metro at Chinatown Senior Lofts consists of two integrated structures—a seven-story building built in the 1920s and a nine-story building that dates back to 1916.
When another developer's plans to convert the buildings into condominiums fell through, Meta Housing Corp. and Western Community Housing stepped in to take over the property and create apartments for low-income seniors.
Bank of America Merrill Lynch, which held the prior owner's defaulted loan, was central to the deal by providing three pieces to the financing puzzle.
First, bank representatives worked with Meta Housing to finance the development and acquire the land from the seller, which allowed the seller to pay off the outstanding loan. This allowed Meta Housing to get a site that it wanted, and it helped Bank of America to salvage the loan and avoid foreclosing on the property.
It also opened the door for additional collaboration on the deal. The bank also provided a $23 million construction loan and a $14.5 million low-income housing tax credit investment in the new housing development.
It's an unusual case of a bank arranging three key pieces of a deal, according to Kasey Burke, vice president at Meta Housing.
Financing for the $43 million project also includes $12.6 million in federal Neighborhood Stabilization Program funds from the city of Los Angeles and $10.5 million from the California Department of Housing and Community Development's Transit-Oriented Development Program from voter-approved Proposition 1C funds.
The financing was completed with $1 million from the Federal Home Loan Bank of San Francisco and the California Community Reinvestment Corp. serving as the permanent lender.
"Bank of America had worked with Meta Housing before on complicated, multi-layered transactions, and this was another example of their expertise in action," says Charmaine Atherton, senior vice president in Community Development Banking at the bank. "This project was somewhat unusual in that many things fell into place, from the Neighborhood Stabilization Program funds to the Transit-Oriented Development dollars. But the key was having a developer that could put all these pieces together. "
Perhaps, Meta Housing was always meant to have the site. It had eyed the site several years earlier, but the property was grabbed by the condo builder. During the time that the prior owners held the property, they took on the early remediation work, stripping the aging buildings to the shell, says Burke.
This saved Meta Housing from doing that work, giving it a jump-start in readapting the buildings into 123 units of seniors housing. The structures allowed for units that are larger than usual.
Metro at Chinatown features loft-style studios as well as one- and two-bedroom units, ranging in size from 548 to 1,340 square feet.
The bank liked the deal for several reasons, according to Atherton.
"This development is at the gateway to the Chinatown community and near a Gold Line station," she says. "It also has no on-site parking, making this project a great example of transit-oriented development. The Metro at Chinatown Senior Lofts also removed a vacant building from an important cultural community and created a LEED-certified asset. Finally, this development provided much-needed affordable housing and services for one of the most vulnerable populations, low-income seniors."
The community also features a strong package of amenities that Meta Housing is known for, according to Burke. This includes a yoga and screening room, a lounge, a resident art gallery, and a rooftop patio.