CDC Gets $8 Million Construction Loan from Citizens Bank for Neighborhood Properties

The East Boston Community Development Corporation (CDC) will get another financial boost for the 111-unit multi-site, affordable housing development that the CDC owns in the neighborhood under Landfall Community Associates.

Following $10.6 million in financing from MassHousing to the CDC for the acquisition, renovation and preservation of the CDC sponsored Landfall properties, Citizens Bank announced it has provided the CDC with an $8 million construction loan to help jumpstart the rehab of Landfall properties.

The multi-site development includes the CDC’s Landfall properties at 72-74 Marginal Street; 259-261, 263-265  and 344-350 Meridian Street; 186-192 Cottage Street; and 403 Sumner Street.

“We greatly value our partnership with Citizens Bank and appreciate the Community Development Group’s market knowledge and excellent execution,” said Albert Caldarelli, president of East Boston CDC. “We look forward to continuing to work with the Citizens team as this project reaches its potential.”

According to Caldarelli 15 of the units will be available to tenants at or below 30 percent Area Median Income (AMI), four units to tenants at or below 50 percent AMI, 53 units are available to tenants at or below 60 percent AMI, 24 units are available to tenants at or below 80 percent AMI and 15 units will be market rate.

“This project meets an important need in the community and Citizens’ leadership is another sign of our strong commitment to supporting affordable housing for Boston residents,” said President of Citizens Bank Massachusetts Jerry Sargent.

The CDC was founded in 1971 and creates commercial and affordable housing property in Eastie. The CDC has developed 280,000 square feet of commercial and industrial job-producing space, 145 affordable family rental units, and 305 affordable elderly rental units in the community.

Earlier this year the CDC closed on a 10.6 million financing loan from MassHousing for Landfall Community properties that would help keep most of the units affordable for the next 15 years.

Ninety-six units at Landfall were originally financed under the state’s Section 13A housing affordability program, making them a risk to lose affordability. The Section 13A program was created by the Massachusetts Legislature in the 1970s to provide low-interest mortgage financing to affordable housing communities. Today, 13A communities serve some of the lowest-income and most vulnerable populations in Massachusetts, including many elderly residents. The mortgages on these 13A housing communities are nearing maturity and no federal resources are available for their preservation, making them high preservation risks.

In response MassHousing and the Department of Housing and Community Development (DHCD) committed a total of $100 million in capital to help preserve affordable 13A units that otherwise would convert to market rates.

The DHCD is providing $1 million in financing toward the 13A preservation at the Landfall properties in Eastie. MassHousing provided a $5.7 million permanent loan, a $4.7 million bridge loan, and a capitalized 13A payment loan of $134,401, and the MassHousing financing generated $5.8 million in equity, through federal Low-Income Housing Tax Credits. The transaction also included a $7.1 million seller note, a $501,188 deferred developer fee and $323,000 in operating income.

Among the property improvements planned are renovation of all kitchens and bathrooms, window replacement and refurbishment, flooring, brick and masonry repairs, building system upgrades, replacement of fire alarm systems and some roof replacement.

The general contractor will be Knollmeyer Building Corp., the architect is Davis Square Architects and the management agent is Metro Management, a subsidiary of EBCDC.

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