Complex transaction including several lenders, investors, charitable gifts and tax credit program allows construction to commence during final fundraising campaign
Vermont Business Magazine The Champlain Housing Trust announced today that it had closed on the permanent financing for its efforts to transform the St. Joseph School into the Old North End Community Center. The $8.8 million transaction secured $2.6 million in federal tax credits by leveraging several other local funding sources.
CHT will now initiate construction and ensure that rents remain affordable for the nonprofit tenants and public uses. Just two weeks ago the Trust announced a lead gift of $500,000 from Trey and Dominique Pecor. Since then, $90,000 in donations have come in, leaving just $110,000 to raise from the community to finalize the $8.8 million project.
The Community Center itself required a “community” of financing to close, including:
- New Markets Tax Credits through Vermont Rural Ventures, with TD Bank’s Community Capital Group as the investor ($2.6 million)
- Charitable gifts & grants ($2.2 million)
- Vermont Community Loan Fund (loan, $2 million)
- Vermont Community Foundation (loan, $500,000)
- Commons Energy (loan, $500,000)
- Public grants, including City of Burlington ($777,000)
- Energy Conservation grants from Vermont Gas and Burlington Electric ($100,000)
- Owner financing ($185,000)
“TD Bank and its Community Capital Group are proud to assist Champlain Housing Trust with this very important redevelopment of the community center which provides critical services for those who need it most in Burlington,” said Phil Daniels, Market President-Commercial for Vermont, TD Bank. “This development will be a space where the community can continue to develop and thrive, and it will contribute to a larger initiative to revitalize this neighborhood and enhance its economic growth.” TD Bank’s funding assistance includes conventional commercial financing and an equity investment under the New Market Tax Credit Program closed by Jonathan Campbell, Vice President in the Community Capital Group.
Vermont Rural Ventures’ allocation of the federal New Markets Tax Credit Program leveraged almost a third of the overall project costs. “We wanted to invest in the Old North End Community Center because the programs strengthen and support low income people in the community where they live,” said Nancy Owens, President of Vermont Rural Ventures, a subsidiary of Housing Vermont.
The Old North End Community Center is home to a wide range of programs offered by several nonprofits and the City of Burlington. The school closed in 2010 and when it was going to go on the market, existing nonprofit tenants asked the Housing Trust to step in and purchase the building to prevent the displacement of their programs. The addition of the Burlington Parks, Recreation and Waterfront Department as a tenant solidified the prospects of a fully occupied community center in the heart of Burlington.
“The City of Burlington is fully committed to the Center, as demonstrated by both its lease and Community Development Block Grant program allocations,” said Mayor Miro Weinberger. “Congratulations and appreciation goes out to all the partners that have come together to move this transformational and challenging project along.”
“The Vermont Community Loan Fund is pleased to play a role in this dynamic project that will lift up the lives of so many Vermonters, from young to old, from long-time resident to New Americans,” said Will Belongia, Executive Director of the loan fund. VCLF also provided initial financing for the acquisition of the school by CHT in 2017.
The Vermont Community Foundation made an early investment as well to help with the purchase and make accessibility modifications to the building by installing an elevator. Dan Smith, CEO, added, “Projects like this provides so much more than just programs. They provide a place to connect, a place to belong. The Foundation has been elevating our focus on mission investing in Vermont and this investment reflects our core values and our vision for Vermont communities.”
With significant upgrades to heating, cooling and electrical systems, there were significant grants and investments from the energy sector. Commons Energy made a $500,000 loan and provided technical assistance to facilitate these upgrades. “This old, historic building is beautiful and teeming with activity. It’s also an excellent example of how we can invest in better systems that not only address climate change but will make the space more comfortable – and more affordable – for the users and owners,” said Matt Dooley of Commons Energy.
Work is underway, coordinated by J.A. Morrissey, Inc with tenants managing amongst the construction.
“With the closing behind us, we turn to managing the construction and asking the community to support this amazing project to help us meet our fundraising goal,” said Brenda Torpy, CEO of the Trust. “We are so thankful to have so many partners and so many donors get us to this point.”
Source: CHT 4.18.2019. www.getahome.org/st-joes.