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The Atlanta Housing Office of General Counsel announced the closing of James Allen Jr. Place Rental Assistance Demonstration (RAD). The closing was completed March 10, 2022, and funds have been disbursed.
James Allen Jr. Place, known formerly as Hightower Manor, will undergo a substantial renovation that will provide needed updates to the property, such as significant system and building envelope improvements, to serve seniors and young disabled residents for years to come.
“Our RAD conversion closings are an example of successful public/private partnerships and interagency cooperation, and this deal brought together Invest Atlanta and the Georgia Department of Community Affairs with Atlanta Housing and its development partner, Columbia Residential, LLC,” said Eugene E. Jones, Jr., president and CEO of Atlanta Housing in a statement. “Atlanta Housing’s talented team members from Real Estate Services & Oversight, Office of General Counsel, Real Estate Transactions Management & Capital Markets, Finance, and Construction and Facilities Management worked tirelessly to make this transaction a reality.”
Key details of the transaction include:
- The renovated highrise will be named after James Allen Jr., the late former AH Board Commissioner and longtime AH employee.
- AH, which formerly owned both the land and Hightower Manor building, retains ownership of the land. The new owner of the building and ground lessee of the land is Hightower Manor Redevelopment, L.P.
- The General Partner is Columbia Hightower Manor Partners, LLC. Atlanta Affordable Housing for the Future, Inc., an AH affiliate, is a 25 percent member of the General Partner and will receive 25 percent of the net cash flow distributable to the General Partner. The other member of the General Partner is New Columbia Residential, LLC (75 percent).
- AH will continue to control the site by virtue of its ownership of the land which is now subject to a ground lease, which expires March 10, 2087.
- All of the development’s 129 units are tax credit units. AH will provide subsidy to all of these units pursuant to the HUD RAD conversion of the Project Based Voucher Housing Assistance Payments contract.
- Tax-exempt bonds were issued by Urban Residential Finance Authority (URFA) in the amounts of $12,800,000 (Series A) and $6,400,000 (Series B) and state and federal tax credit equity in the amount of $23,433,654 was provided by Wells Fargo, with proceeds used to pay building acquisition, rehabilitation and project costs.
- Wells Fargo provided a 1st Priority Freddie TEL in the amount of $4,000,000 with a 15-year term.
- AH provided two loans: a 2nd Priority Capital Loan and a 3rd Priority Purchase Money Loan. The 2nd Priority Capital Loan is $2 million, with a loan term of 37 years with an annual interest rate of 0.5 percent.
- The 3rd Priority Purchase Money Loan is $6.4 million with a loan term of 37 years. This loan is evidenced by a Series B bond note. AH will be the holder/owner of the Series B bond note.
- AH received $84,000 in construction/permanent loan financing fees and received $30,600 in construction inspection fees at closing. The outstanding predevelopment loan balance of $390,250 was also repaid at closing.
- In addition, AH will receive payments equal to 1 percent of gross rental income collected for its asset management services fee and 25 percent of the Developer’s net developer fee for its co-developer fee.