Beacon Communities Development

LAWRENCE

Bridging to tax credit equity.

Affordable housing developers faced stiff headwinds in 2009 as the low income housing tax credit markets seized up, leaving many projects without equity investors. The strongest deals with the healthiest sponsors had some success in attracting private equity investors but were forced to re-work project budgets to address significant shortfalls due to diminished equity investments. This changing landscape of tax credit equity investment has resulted not only in less equity to fund projects, but also in a slower pay-in schedule, as investors delay the placement of equity until the back end of the project. TLI is addressing this emergent need for flexible bridge and construction financing to address this changing landscape.

In late 2009, TLI closed a construction loan to Beacon Communities Development (BCD), one of the premier affordable housing developers in Massachusetts. The Life Initiative has participated with Wainwright Bank to provide a $7.5 million construction loan to BCD for the redevelopment of part of the former Sacred Heart parish complex in south Lawrence. BCD will convert two former school buildings and the convent on the site, shuttered when the Archdiocese of Boston closed down the parish in 2005, to forty four units of elderly rental housing. Private investors will supply the bulk of the project’s financing through investments of equity triggered by use of federal and state low income and historic tax credits. TLI and Wainwright will bridge the private equity and provide construction financing.

This deal will not only provide 44 seniors with newly renovated housing, but will generate a significant number of construction related jobs for the Lawrence area.