CHICAGO – Governor Rod Blagojevich announced today that the Illinois Housing Development Authority (IHDA) has successfully issued $35 million of fixed and variable rate bonds to preserve 461 units of affordable housing in Chicago and Decatur. Twenty five million dollars in fixed rate bonds will finance the acquisition and rehabilitation of Campbell Terrace Apartments, a 249 unit high-rise for elderly residents in Chicago’s fast gentrifying Logan Square neighborhood. In Decatur, $10 million in variable rate bonds will finance the acquisition and rehabilitation of two developments that total an additional 212 units for low-income families and elderly.
“Helping Illinois families – those with low income, the elderly or families with special needs -- get financing for a safe and decent home has always been the mission of IHDA,” said Governor Blagojevich. “And, last year, I asked the department to do more when I created the Affordable Housing Task Force whose goal is to develop the state’s first comprehensive affordable housing plan. Today’s announcement, along with IHDA financing 1,254 units since December, reaffirms the Task Force’s mission to preserve affordable housing in Illinois.”
“We are excited to have preserved the affordability of these apartments, especially in areas of the state that have seen a huge increase in the cost of housing,” said Kelly King Dibble, the Executive Director of the IHDA and the state’s highest ranking housing official. “We are also proud that we are able to perform this vital financial and social role for the state while not burdening Illinois with any moral or general obligation for the bonds. These bonds, and the more than $92 million in private placements IHDA has issued since December, are not obligations of the state but obligations of the Authority.” The bond issuance was from an allocation of $35 million of bond volume cap of the Authority.
Campbell Terrace Apartments
The new owner of Campbell Terrace intends to immediately spend $2.9 million on the renovation of the twelve-story high-rise building at Western and Campbell Avenues. Renovation will include landscaping and common area updating, new kitchens, baths and lighting, and some units will be repainted, carpeted and floored. Additionally, the property will receive updated security systems.
Campbell Terrace was originally placed into service in 1985, also with financing from IHDA, with a Section 8 “HAP Contract” providing rental assistance for its 249 units. For almost twenty years, Campbell Terrace has provided safe, clean and affordable housing for the elderly in a neighborhood largely devoid of similar housing alternatives. The original HAP Contract, administered by IHDA, provides rent assistance through 2015, which will be preserved.
IHDA financed the acquisition and rehabilitation of Campbell Terrace with tax-exempt bonds and the allocation of 4% tax credits that were syndicated in conjunction with the bond issuance. “The structure of the financing will ensure that Campbell Terrace remains affordable to tenants earning 60% of the area median income for fifteen years,” said Mark Carbone of Related Apartment Preservation, LLC, a representative of the new owner of the property. Management will also continue to provide an array of social services and activities to the tenants, cultivating and preserving this enviable community for years to come.
Southern Hills & Orlando Apartments
The $10 million variable rate bonds will finance the acquisition and rehabilitation of Southern Hills and Orlando Apartments, both in Decatur. Southern Hills, a 125-unit family development on 9.5 acres in Decatur, consists of 28 one- and two-story townhomes with a mix of one-, two- and three-bedroom apartments for families. Orlando, originally The Orlando Hotel built in 1930 in downtown Decatur, is a historic landmark. The Orlando provides 87 units of housing for elderly tenants in a seven-story elevator building. With the new financing from IHDA, the new owner intends to immediately spend $1.9 million on renovation for both developments.
“The single development of Southern Hills represents as much as 20% of the low income units available in the area so it is vital that we were able to preserve these units,” said Dibble.
“Both properties are at or near capacity – so much so that Southern Hills has a one to two year waiting list,” said Mr. Carbone. “The extensive upgrades at both properties will only enhance the demand for apartments at both properties.” Renovation at Southern Hills includes landscaping, common area updating and extensive roof repairs. All units will receive new kitchens and baths and some units will be repainted and recarpeted. The scope of work at Orlando is similarly expansive, with improvements to the exterior, common areas, lobby and kitchen planned.
Tenants have access to a variety of amenities such as a game room, arts & crafts room, library, lounge, private outdoor patios (Southern Hills only) and coin-operated laundry facilities. Unit amenities include ceiling fans, cable hook-ups, window treatments, carpeting and air conditioning available upon request. Southern Hills Apartments features central air, cable, carpeting and window treatments. Management offers an extensive social services program at both sites including medical information seminars, referrals and visits, as well as a range of activities and resident trips.
As with Campbell Terrace, IHDA financed the acquisition and rehabilitation of the Decatur properties with tax-exempt bonds and the allocation of 4% tax credits that were syndicated in conjunction with the bond issuance. The structure of the financing will similarly ensure the properties remain affordable to tenants earning 60% of the area median income for fifteen years. In addition, financing from the Illinois Affordable Housing Trust Fund was also used.
The bonds are insured by Financial Security Assurance and rated AAA. Fannie Mae purchased $22 million of the fixed rate bonds with $3 million purchased by local firms. Loomis Sayles and AG Edwards each purchased $1.5 million. The variable rate bonds will be remarketed weekly and were structured with a 5% cap on the interest rate for an eight year period, provided by Bear Stearns. The financing structures require these developments to both accept new and future Federal subsidy, if any after the Section 8 financing commitment expires.
About the Illinois Housing Development Authority
The Illinois Housing Development Authority (IHDA) finances the creation and the preservation of affordable housing across Illinois. Since its creation by an act of the Illinois legislature in 1967, IHDA has allocated more than $6 billion and financed more than 150,000 units of affordable housing across the state. IHDA accomplishes its mission through a number of federal and state funding sources, including the Illinois Affordable Housing Trust Fund, the State’s Donations Tax Credit Fund, the allocation of federal Low Income Housing Tax Credits, HOME Investment Partnership funds and others. IHDA is a nationally recognized and highly rated bonding authority that independently sells bonds, based on its own credit ratings, to finance affordable housing across the state.