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The Benoit Group, Atlanta Housing, and Invest Atlanta have closed on the sale of former co-op community London Town Houses, at 308 Scott St SW., according to a recent press release. “Without this deal, almost 200 affordable housing units would have undoubtedly been lost and redeveloped as market rent apartments,” Eugene Jones, CEO of Atlanta Housing, said in the release. “Atlanta Housing is not only proud to help save this development but to renovate and improve it for current and future residents.”
London Town Houses was a cooperative facing foreclosure when The Benoit Group stepped in and purchased the delinquent note. Benoit then engaged Atlanta Housing and Invest Atlanta to map out the plan to finance the redevelopment and subsidize rents in the community that The Benoit Group’s CEO, Eddy Benoit, believes will now become a catalyst for new development in the area.
“In late 2017, we were fortunate to be in a position to step in and prevent the foreclosure of this cooperative property,” Benoit said. “Partnering with the City of Atlanta, HUD, Invest Atlanta, and Atlanta Housing allowed us to be creative and move forward with this $40 million redevelopment. This project will offer a significantly improved housing lifestyle option for the residents and will also stimulate new development activity in this designated opportunity zone.”
With an infusion of tax credit equity from PNC Bank, tax-exempt bond funds from Berkadia Commercial Mortgage, and funds from Atlanta Housing, the property will be completely renovated into a mixed-income housing tax credit development with long-term affordability requirements. Ninety percent of the 200 units will be set-aside for households earning 60 percent or below the area median income and ten percent will be market-rate. “Thanks to Atlanta Housing’s 15-year HomeFlex commitment, these returning residents’ rents may actually decrease and are guaranteed not to exceed 30 percent of their monthly income,” according to the release.
The property will also undergo an extensive renovation, providing much-needed new infrastructure, substantial interior and exterior improvements by adding new energy-efficiency unit amenities, and outdoor living spaces, a new clubhouse with a media center, fitness center, and clubroom for the community common areas.
Resident relocation began in the first week of September, with residents being placed in either Benoit-owned and managed communities, or others that met their space, transportation and school district needs and they will be able to go back to their units in approximately nine to twelve months.
Atlanta Housing provided a $1.1 million construction loan and a $6.3 million bridge loan, and multifamily tax-exempt bonds were issued by Urban Residential Finance Authority (Invest Atlanta) in the amount of $19,600,000, with approximately $20 million in federal and state tax credit equity provided by PNC Bank, National Association. Proceeds were used to pay building acquisition, rehabilitation, and other development project costs. The property was financed using a first priority construction/permanent FHA insured mortgage loan in the amount of $21,894,000 from Berkadia.