ABANDONED FOR MORE THAN A DECADE, the former manufacturing home of the H.F. Miller and Sons tin box company provides the opportunity for a development team to think outside of the box as it leverages New Markets Tax Credits (NMTC) across the city of Baltimore.
Miller's Court, a $21.9 million redevelopment of the H.F. Miller site by Seawall Development Corp., with a finance group that included Enterprise Community Investment, SunTrust Community Capital, and U.S. Bancorp, opened to great fanfare in September, with Maryland Governor Martin O'Malley applauding the 40-unit affordable apartment community created specifically for educators. The property also features 34,000 square feet of office space and 1,000 square feet of retail.
While marketing workforce housing to teachers isn't a new idea, the concept of incorporating office space into an NMTC project and leasing that space at affordable market rents to both health and human services and educator groups (major tenants include Teach for America and Catholic Charities) provides a holistic footprint.
Of the community's 40 units, 10 have been designated as affordable, more than satisfying NMTC requirements that eight units be set aside for those earning less than 80 percent of the area median income.
To fund the $21.9 million capital stack, NTMC equity financing was generated by a $9.4 million allocation from Enterprise and a $9.5 million allocation from SunTrust Community Capital. Additional financing was provided by federal and state historic tax credit equity and loans from the state of Maryland and the city of Baltimore. U.S. Bancorp's Community Development Corp. served as Enterprise's NMTC and historic tax credit investor. SunTrust Bank funded a $5.8 million leverage loan and SunTrust Community Capital served as the NMTC and historic tax credit investor to SunTrust Community Development Enterprises.
“Miller's Court is a poster project for a new markets deal,” says Enterprise senior vice president of structured finance Joseph Wesolowski. “Putting the overlay of education on top of the real estate development has really made this a successful project at a time when things aren't so good in real estate.”