$52.5M SoMa Affordable Housing Project Gets Financing Secured
Merchants Capital just secured a construction loan from Merchants Bank of Indiana for the development of an affordable housing project at 53 Colton St. in San Francisco’s South of Market area, according to a press release. Developed by Strada Investment Group and Community Housing Partnership, Merchants Capital provided the Low-Income Housing Tax Credit equity bridge loan in addition to the construction loan.
This winter, groundbreaking is expected for the project that will create 96 affordable and supportive efficiency studio apartments for formerly homeless adults, which is expected to be complete in 2022. All of the units will be reserved as part of the Coordinated Entry System that assesses, prioritizes and matches individuals experiencing homelessness with housing opportunities.
“Closing the first MBI construction loan in downtown San Francisco is a tremendous success for Merchants Capital,” Lee Oller, the financial service company’s executive vice president, said in the release. “This development is especially noteworthy as it takes an overlooked area and transforms it into a new hub of activity for both residents and workers. This is truly taking a net-negative and turning it into a net-positive for the neighborhood and the city. We at Merchants are proud to have partnered on such a meaningful project for San Francisco and the Bay Area.”
The 53 Colton project is part of a multiphased development plan led by the UA Local 38 Plumbers & Pipefitters, which includes a new union hall at 1629 Market St., market-rate housing, retail and a public accessibly park, according to a project description from the AFL-CIO Housing Investment Trust.
The AFL-CIO HIT launched a $1B initiative in September to fuel jobs and housing creation in the Bay Area in response to the economic downturn caused by the coronavirus pandemic. Over the next five years, the fund is geared to invest $500M in multifamily projects in the region. HIT will invest $19.1M in the 53 Colton project, one of the first to be funded by the initiative.
“53 Colton is a wonderful example of what’s possible with a partnership that includes for-profit and non-profit developers, the City of San Francisco, State of California, organized labor, and financial institutions like Merchants, Enterprise [Community Partners], and the AFL-CIO,” Strada Investment Group founding principal Michael Cohen said in the release. “We are thrilled to see this project come to fruition.”
Designed by David Baker Architects, the studio units will each have a private bathroom and kitchenette. The building, described as “beautiful, sustainable and cost-efficient” in the press release, will have amenities including a community room with a dining area and kitchen, a bike room, laundry facilities and a private landscaped courtyard. On-site case managers and counselors are intended to provide supportive services to improve residents’ quality of life.
"Our organization's mission is to create a permanent home for people who have experienced homelessness,” Community Housing Partnership CEO Rick Aubry said in the release. “The challenge is large and requires all of us to work together. We have forged partnerships with lenders, state and local government and philanthropy to achieve the goal. Our partnership with MBI was instrumental in our success.”