Preservation of Affordable Housing (POAH) has acquired a 240-unit mixed-income development across from the planned Obama Presidential Center in Chicago.
“We are delighted to announce our purchase of Island Terrace Apartments,” said Bill Eager, POAH senior vice president. “Through this acquisition, we now have preserved and expanded housing opportunities from the west end of Woodlawn to the very eastern edge.”
POAH purchased the property for $29.5 million from PNC Bank, which has held the property since 2015. The apartments were once owned by George E. Johnson Sr., founder of Johnson Products Co., a famous Chicago-based cosmetic company.
“The imminent building of the Obama Presidential Center has fueled fear as well as excitement with concerns about speculators and sky-rocketing housing prices,” said Kristin Faust, executive director of the Illinois Housing Development Authority, whose allocation of 9% low-income housing tax credits, along with a financial commitment from the city of Chicago, made the purchase possible. “We are delighted to be able to assist in POAH’s preservation of this and other housing developments in Woodlawn, which is, in many ways, a model for preserving mixed-income neighborhoods.”
John Nunnery, senior vice president and manager of preservation investments for PNC, also praised the deal.
“The continued availability of affordable rental housing for families and seniors is at risk across the country as a wave of affordable properties are being sold to owners with little or no interest in maintaining these properties at affordable rents, which is why we purchased Island Terrace Apartments five years ago,” he said. “As properties like Island Terrace are sold, they are at risk of eventual conversion to market rents, which is why we are thrilled we found the right developer in POAH to move Island Terrace forward into the future.”
POAH will take over property management through its affiliate, POAH Communities, immediately and begin renovations on the 52-year-old property next year. The work will include improvements to the building’s major systems, modernization of the one-, two-, and three-bedroom apartments, and upgrades to resident community spaces. The organization is financing the acquisition with a loan from Merchants Capital and its own equity.
POAH, which is celebrating its 20th year, began its work in Woodlawn in 2008, undertaking the successful redevelopment of the 504-apartment Grove Parc Plaza along Cottage Grove Avenue on the western side of the community. Since then, the nonprofit has acquired or built nearly 1,000 apartments in Woodlawn, with the vast majority targeted to low-income individuals and families, and 2,400 in total in the Chicago market.
Headquartered in Boston, POAH owns and operates more than 12,000 affordable homes at more than 120 properties in 11 states and the District of Columbia.