Developers have broken ground on the first phase of a unique project that will bring affordable housing as well as a new recovery center to downtown Nashville, Tennessee.
Shelby House is a joint effort by Holladay Ventures and Evergreen Real Estate in conjunction with Samaritan Recovery Community (SRC), which has operated at the location since 1964. The nonprofit will continue to be part of the new development with space that more than doubles its operations from 50 to 132 beds.
Affordable housing will be the other major component with a total of 484 units built over two phases. The first phase includes 195 units reserved for families earning between 20% and 80% of the area median income (AMI). The goal for the second phase is to build workforce housing for residents earning between 80% and 120% of the AMI.
Twenty-five percent of the units will be covered by project-based vouchers, with graduates of the recovery program being given priority for those units, according to Evan Holladay, founder and CEO of Holladay Ventures.
The idea is to create a bridge from substance-abuse recovery through transitional housing and into permanent, independent housing.
Shelby House will also show how “a nonprofit that has mission alignment with providing individuals who are in need of safe shelter, services, and empowerment can greatly benefit from creating affordable housing either on their parcel or a different location,” Holladay says.
It was important to SRC to keep serving clients without disruption, so its existing facility will continue to operate while the new facility is being constructed on the property as part of the first phase.
The nonprofit also wanted to own its building. As a result, the team structured the deal so that at the end of a 15-year compliance period, SRC will take back ownership of the building from the partnership with no debt, according to Holladay.
For him and the others, Shelby House has been one of their most complicated yet rewarding deals.
“One of the biggest takeaways is if you put together a meaningful enough project with tremendous impact, a great nonprofit partner, and a great story behind your development, you can make a tremendous project,” Holladay says.
Financing for the approximately $70 million first phase includes 4% low-income housing tax credits, tax-exempt bonds, and state Community Investment Tax Credits from PNC and the Tennessee Housing Development Agency (THDA). THDA also provided financing from the National Housing Trust Fund. Other funding partners include Fannie Mae, the Barnes Housing Trust Fund, and Metropolitan Development and Housing Agency.
The development team sees Shelby House as a strong project driven by social impact.
“Projects like this, where you’re partnering with a nonprofit that’s already doing great work and has a consistent track record of providing real impact in the community, allows us to amplify what they’re doing,” Holladay says. “We’re helping expand and widen what they can do from the substance abuse recovery standpoint and complementing that with affordable housing.”
Developments with strong nonprofit partners will become an active part of his firm’s work. “We’re doubling down,” Holladay says. “We like and enjoy this model. It’s very impact-driven.”
