Mostly-market rate development represents effort to bring investment to city
Posted on October 3, 2007
LAWRENCE --- This wasn’t your usual grand opening. The crowd was larger. The speeches were more heartfelt. The occasion was the opening of Washington Mills Lofts, the first of Lawrence’s many mammoth mill buildings to be converted into housing.
Made possible due in part to a $13.25 million long-term loan commitment from the Massachusetts Housing Partnership, the six-story former woolen mill near the Merrimack River and downtown Lawrence has been transformed from a 240,000-square foot vacant building into 155 studio, one and two-bedroom loft apartments, with sixteen of the units affordable to households below 80 percent of median income, with the remainder to be rented at market rate.
Normally a lender to rental projects that include a higher percentage of affordable units, MHP made this loan commitment through a new program called the Community Revitalization Option, which is designed to promote the development of housing serving a wider range of incomes in communities seeking to spark downtown revitalization and investment.
“Lawrence is one of the great industrial cities of the Commonwealth, like Lowell, like New Bedford, like Brockton and Worcester,” said MHP Executive Director Clark Ziegler at the Oct. 2 event. “And all of these cities are trying to find the way back to what they once were. There’s no playbook for this. This is an example where a lot of people saw an opportunity and responded with what needed to be done.”
“MHP is well known for its multi-family lending programs but to insiders it’s also a financial research and development group,” said Gene Clerkin, a senior vice president for the Bank of America’s Community Development Corporation (BACDC), the project’s co-developer. “We went to MHP last winter to ask if our program could fit into their affordable housing world and they created a new loan program for our project. This was the final financing piece to our puzzle and we are very excited to have their support.”
The project was co-developed by the Architectural Heritage Foundation and BACDC, a Bank of America subsidiary that promotes long term-revitalization in low and moderate-income communities through real estate development and investment. For Washington Mills Lofts, Bank of America is providing over $27 million in construction financing, as well as a portion of the permanent financing.
“It’s fashionable these days to bash the big banks for not having a feel for how things happen locally,” said MHP’s Ziegler. “But this project could not have happened without the Bank of America, which has the depth and the experience to get these types of deals done.”
Additional financing came via a $2.8 million economic development grant from the state legislature and championed by the local delegation, including Representative David Torrisi and State Senator Susan Tucker. The project also received a $1 million Community Development Block Grant from the City of Lawrence. Acquisition financing was provided by Boston Community Capital.
MHP is a quasi-public state agency that provides long-term loans for affordable rental housing using private bank funds and at no cost to the taxpayer. This is possible due to a 1990 state law that requires companies that purchase Massachusetts banks to set aside a portion of the acquired assets to MHP. Since then, MHP's loan pool has grown to over a $1 billion and it has provided over $534 million in loans and commitments for the financing of 13,700 units of rental housing. For more information, contact MHP’s Director of Lending, David Rockwell, at 617-330-9944 x222.
For more information about units at Washington Mills Lofts, contact property manager Hilary Behrens of S-C Management, at 978-685-3335.