GHC Housing Partners’ acquisition and state-of-the-art rehab of Bicentennial Tower has contributed to the revitalization efforts in Detroit’s growing and vibrant Midtown neighborhood.
One of the leading affordable housing owners in the nation, the Sherman Oaks, Calif.–based firm purchased the 300-unit Bicentennial Tower as part of a portfolio acquisition of several Michigan developments that were being liquidated by a primarily market-rate owner.
The 1978 building had little work and money put into it over the years, operating as the status quo, according to Greg Perlman, founder and CEO of GHC Housing Partners. It also had encountered issues with crime.
Perlman says the development team focused on a rehab that would rival the best market-rate project in the booming neighborhood.
“It’s amazing to watch the transformation of the neighborhood after we acquired the project,” says Perlman. “We are providing an affordable housing property as high quality as any.”
The $25.6 million acquisition-rehab, which was substantially completed in November, was one of the first projects to be financed with the Federal Housing Administration (FHA) Tax Credit Pilot Program, with Pillar as the FHA MAP (Multifamily Accelerated Processing) lender. The pilot program aims to speed the processing time for FHA-backed deals that use housing credits by better aligning the programs.
Financing also included 4% low-income housing tax credits and tax-exempt bonds through the Michigan State Housing Development Authority. Since the market for third-party tax credit investments in the city of Detroit was limited at the time, GHC Housing Partners structured the equity investment to purchase and redevelop the project itself.
Bicentennial Tower includes 251 one-bedroom and 49 two-bedroom units, with two-thirds serving seniors and the remainder for families. The majority of units serve households earning 60% of the area median income, with project-based Sec. 8 Housing Assistance Payment contracts covering 299 units.
Completed in less than a year while keeping residents in place, approximately $30,000 was spent to modernize the units with refurbished kitchens and bathrooms as well as upgraded flooring. LED lighting, water-saving devices, and high-efficient HVAC systems also were installed.
“You get this one bite of the apple to do a major renovation, so you do whatever you can so that this property will be running efficiently for the long term,” says Perlman.
In addition to the energy-efficient and cosmetic updates, GHC Housing Partners enhanced amenities and created a services package for the residents.
The development team updated the underutilized common areas to include modernized elevators, a renovated community room, a new fitness center, and a theater room. Two full-time service coordinators have been hired to help organize social, health, and educational programming for the residents. Also, the building features a 24-hour guard and doorman service.
“We know we are looking at people who age in place here,” Perlman says. “When we have the opportunity to get tax credits and do major renovations, we make it as close to independent living as possible.”