Ever since its construction in 1971, Pequot Highlands has been an important source of affordable housing in the increasingly unaffordable community of Salem, Mass.
Recognizing its significance, Silver Street Development Corp. (SSDC) took on a $65 million effort to purchase the property, complete urgent repairs, and improve the property’s energy efficiency and interiors.
The most pressing issue was a deteriorating brick façade that was peeling away from the walls and creating a hazard. The SSDC team addressed the problem by replacing the façade with energy-efficient metal paneling, a move that eliminates the brick panels and updates the property with a fresh modern look and nearer to today’s energy codes. Aside from the look, the new envelope will provide a projected 10% annual reduction in energy use.
The preservation effort, which will be completed this year, will include about $20 million in rehabilitation. Beyond the façade overhaul, SSDC is committing about $9 million to install energy-efficiency measures, new elevators, and cosmetic upgrades in the apartments and common areas.
“The end product is the best of both worlds,” says Christopher Poulin, COO at SSDC. “It’s like getting a brand-new building using today’s energy-efficiency techniques and a bold new façade to boot. The image is no longer the imposing, drab brick design of the 1970s’ vintage Department of Housing and Urban Development property.”
In another move, the firm has expanded affordability at Pequot Highlands, a development made up of two buildings connected by a bridge. The buildings have a combined 250 units, of which only 100 units had been affordable. Since acquiring the property in 2016, SSDC has doubled the affordability at the development by making 200 units affordable to residents earning no more than 60% of the area median income, including 125 units that are under a Sec. 8 contract.
Key financing sources for the development include about $14.8 million in low-income housing tax credit equity from Boston Financial Investment Management and $41.3 million in tax-exempt financing from MassHousing.
“The tenants are going to benefit because of the quality standards and long-term vision that we have for our properties,” Poulin says.
