Merchants Capital has announced the closing of $102 million in combined debt and equity financing to support the redevelopment of Granada Homes, a historic affordable housing property located along the iconic River Walk in downtown San Antonio.
Originally constructed in 1927 as the Plaza Hotel, the 14-story, mixed-use property is currently home to low- and very low-income seniors.
Granada Homes is comprised of 265 studio and one-bedroom units. The detailed renovation plan includes upgrades to the finishes and offerings of all units, designed to specifically meet the needs of seniors. The redevelopment will also expand the affordable housing stock through the conversion of underutilized commercial space to additional affordable units.
The financing for the project includes a $43 million Merchants Bank of Indiana construction loan, $35 million in Merchants Capital syndicated tax credit equity. Merchants Capital also secured a forward commitment for $24 million from Fannie Mae for permanent financing with the mortgage-back security being purchased by teh AFL-CIO Housing Investment Trust (HIT).
The deal involves one of the first executions of HIT's "Build to Bond," which ensures that the project will be constructed with 100% union labor, according to officials.
“Completing this transaction in a record 60 days required the focus and attention of multiple disciplines across the Merchants product platform,” said Lee Oller, executive vice president of Merchants Capital’s Chicago office. “We are incredibly thankful to our developer and our long-term partnership with the AFL-CIO, which brought the project to fruition.”
“The Merchants Capital equity team was proud to provide $35 million in federal historic, state historic, and federal low-income housing tax credit equity financing to revitalize this community, in a first-of-its-kind financing structure in partnership with the AFL-CIO,” said Julie Sharp, senior vice president of tax credit equity at Merchants Capital. “Our nimble financing structure allowed the project to close in record time, and further solidified Merchants as a single-point of execution for all aspects of debt and equity financing for affordable housing projects across the United States.”
The new financing also includes a mark-up-to-market of the Section 8 contract, an 8(bb) transfer of a Housing Assistance Payments contract, and the issuance of enhanced vouchers as well as a 100% ad-valorem tax exemption, reported officials.
“We are excited for the partnership with Merchants and the AFL-CIO and look forward to enhancing and expanding affordable housing and good union jobs in San Antonio alongside our partner, Granada Trades Council Housing (GTCH),” said Victor Atkins and Pat Biernacki, the principals of Canopy, the developer working with GTCH on the redevelopment.
GTCH, a nonprofit with the mission of providing rental housing to low-income elderly persons, is directed by the San Antonio Building & Construction Trades Council.
