Sioux Falls, S.D. – The 62-unit Falls Terrace Apartments will be completed this spring and will increase the area’s affordable housing stock by about 10%. The project, which is being built by McDonald Ladd Development, LLC, is located in South Majestic View Place, a residential neighborhood located in the eastern portion of Sioux Falls.
The city’s low vacancy rate, a combined 3% for both market-rate and affordable units, translates into a solid market. “Although Sioux Falls’ housing market is not necessarily a high-growth market, it’s a steady and reliable one,” said Eric Trucksess, executive vice president at CharterMac Capital, the equity investor for Falls Terrace, which used 9% low-income housing tax credits (LIHTCs).
Total development costs of the new project are estimated at about $6.9 million.
When completed, the development will provide 48 three-bedroom apartments and 14 four-bedroom units for families earning no more than 60% of the area median income. The units will range in size from 1,080 to 1,952 square feet, with rents starting at $600 a month.
Designed by local architecture firm Van De Walle & Associates, LLC, Falls Terrace will be made up of six two- and three-story buildings. Each building will feature an energy-efficient exterior and heavily insulated walls, important design features in a region where winters are long and harsh. In addition, Van De Walle & Associates designed around a steep slope that was about 40 feet from end to end.
One of the amenities at Falls Terrace is the inclusion of individual washers and dryers in every unit, a feature not often seen in the region’s rental housing stock. Falls Terrace Apartments will also include balconies, a computer room and community rooms for residents. The project is scheduled to finish construction in May 2006, with complete lease-up expected by November 2006.
Housing agency supports project
The new development has received strong support from the state housing agency. “The South Dakota Housing Development Authority (SDHDA) has been one of the easiest government agencies we’ve worked with; they were very helpful in the acquisition process,” said David Page, principal of McDonald Ladd. “It’s a progressive agency, with individuals who want to see affordable housing grow and stay in the city.”
SDHDA has approximately $2.2 million in annual LIHTC authority. Changes to the 2006 qualified allocation plan include increasing the points for readiness from 100 to 150. The maximum possible points is 1,000. In another move, SDHDA has increased its replacement reserves to $350 per unit, up from $300 in 2004-2005.
The project also benefited from the developer’s long-standing relationship with CharterMac. It is the 65th multifamily development – almost all of them affordable – in which the company has invested with the McDonald Ladd family development team, with Charter-Mac providing $4.3 million in equity financing to the deal.
Citibank Community Develop-ment will provide a total of $4.65 million to the project – about $2.25 million in first-mortgage financing and $2.4 million in construction financing. Citibank is not new to Sioux Falls. The bank’s credit card operations have been based in the city since the 1980s.