Number of Units

32

Year Developed

2021

Development Costs

$7,380,074

Goal

Preservation of 32 affordable apartment homes in Lancaster County, PA

Description

Mission First plans to preserve and recapitalize Park Place Apartments, a 32-apartment, affordable housing community located at 155 East Park Street in Elizabethtown, Lancaster County, PA. The property contains all one-bedroom one-bathroom units, ranging from 500 to 600 square feet in size. Park Place is part of portfolio of five properties in York and Lancaster counties acquired by Mission First in May 2018 (including Sassafras Terrace). The building is a former factory, which was converted to affordable housing around 1989, and is now out of its 15-year compliance period.

 

Park Place is one of the few affordable housing resources in Elizabethtown, housing some of the most vulnerable residents in the municipality. The unit mix for the property will be 20 apartments (60%) at 50% of the Area Median Income (AMI), and the remaining 12 apartments at 60% of AMI. The current residents earn well below these income thresholds; all current residents earn below 50% of AMI, and over half of the residents qualify as extremely low income, earning below 20% of AMI. Despite its declining physical condition, the property has sustained very high levels of occupancy since being converted to apartments, demonstrating a strong demand for affordable housing in the Elizabethtown market area. It is critical to maintain affordable housing in middle-income communities such as Elizabethtown, which have access to quality schools, jobs, and other amenities, which can give low income households better opportunities for upward mobility.

 

Park Place Apartments was last renovated nearly 30 years ago, and is at risk due to its declining physical condition. The property’s existing EIFs system was incorrectly installed without sheathing, appropriately inset windows, or a vapor barrier. These conditions have resulted in constant moisture infiltration issues, which could threaten resident health and safety if not addressed. The property’s major building systems have reached the end of their useful life. Action must be taken now to address the property’s physical needs while they can still be accommodated within a 4% tax credit transaction budget.

 

Mission First will replace the façade of the building’s main three-story structure, and rebuild with new 2×6” studs, insulation, sheathing, weather barrier, rain screen and interior drywall. As part of the renovation, Mission First will replace all of the windows with new energy efficient windows throughout, replace the roof membrane to ensure the full building envelope is water-tight. Mission First will also conduct upgrades of the HVAC, kitchens, bathrooms, and floors in the units as needed.

 

The renovations at Park Place Apartments will be conducted in two phases. The first phase will be to address the building’s urgent water infiltration issues on the building’s façade. Due to the property’s urgent health and safety risks, this work must be initiated immediately to protect the residents. This work will be commenced in the summer of 2020 and be funded solely by the $1,500,000 CDBG/HOME loan from the Lancaster County Redevelopment Authority (LCRA).

 

The second phase will include renovations in the building’s common spaces and unit interiors. This second phase will take the form of a 4% Low Income Housing Tax Credit (LIHTC) Acquisition/ Rehabilitation project, which will close in the fall of 2020. The property will be transferred to a new tax credit partnership, MF Park Place LLC. This phase’s renovation will be funded using tax exempt bonds, LIHTC Equity, and Seller financing. At the closing for the second phase, the LCRA loans will be assumed by MF Park Place LLC. For any costs that MF York Lancaster LLC incurs prior to the tax credit closing using these funds, MF Park Place will “step into the shoes” of these costs. See tab 21 for a letter from our Tax Counsel, Berman Indictor LLP, regarding the IRS “Step in the Shoes” rules. In December 2019, Lancaster County approved a bond inducement resolution, which will allow Mission First to capture all costs incurred in Phase 1’s urgent repairs in tax credit eligible basis.

 

Park Place Apartments is a highly visible and recognizable building for Elizabethtown residents. It is one of the few large multifamily buildings in the Borough, and is one block away from the two largest commercial streets, High St. and Market St. City and County officials have expressed concern over the building’s poorly constructed façade, and a desire to invest in this property to turn it from an eyesore to an attractive and contextual building, which will add to the community’s value. This investment would reinforce major recent and planned investments in Elizabethtown Borough, including a $6 million renovation of Elizabethtown Area Middle and High Schools and a $3.9 million expansion of Elizabethtown College’s campus to include a new 10,000 square foot building for the College’s new physician assistant program.

 

Mission First Housing Group has received strong support from Lancaster County for this development, as evidenced by their commitment of $1.5 Million in CDBG and HOME funds for this renovation. Elizabethtown Borough and PA Senator Ryan P. Aument of 36th District have also confirmed their support of this project.

 

Mission First is planning to complete its Underwriting Application for 4% Tax Credits and Tax Exempt Volume Cap from PHFA by July of 2020, which will allow the project to generate roughly $1 Million in Tax Credit Equity to support the renovations. Once the PHARE allocation in place, the project will be fully funded and prepared to close by the fall of 2020. The requested PHARE funds are crucial to the project’s financial feasibility.

 

Construction is expected to be complete by the summer of 2021 and Mission First expects to reach stabilization by the end of 2021.