The Michaels Organization had a positive 2019. To become a stronger company, this national real estate leader fully implemented its refreshed brand identity to better reflect its integrated capabilities. As part of its new branding, all of its areas of expertise—development, management, finance, and construction—and its operating companies operate under the Michaels brand name.
Michaels, which is a leader in affordable, market-rate, student, and military housing, moves up two spots on the NMHC Top 50 Owners list this year to No. 19 with 52,119 units owned as of Jan. 1. It ranks at No. 27 on the NMHC Top 50 Managers list and No. 14 on the NMHC Top 25 Developers list. In addition, it continues to lead MFE sister publication Affordable Housing Finance’s AHF 50 Owners list with 45,682 affordable housing units in 378 properties and ranks No. 3 on the AHF 50 Developers list, starting 1,426 affordable housing units in 2019.
The firm also relocated its headquarters in June 2019 from Marlton, N.J., to Camden, which the firm says symbolizes its commitment it makes to cities across the country to transform communities and uplift lives.
The owner and developer has a long history the community, working with the Housing Authority of Camden to revitalize neighborhoods and develop new housing, building student housing for Rutgers University–Camden campus, and recently completing the development of the first luxury apartments on the Camden waterfront in almost 15 years.
In recent weeks, the firm has been overcoming challenges related to the COVID-19 pandemic to keep its development pipeline moving. In its home state, Michaels closed the financing and started site work on the second phase of the 2720 Fire Road community in Egg Harbor Township at the end of April. The $15 million development will provide 60 one-, two-, and three-bedroom units with rents affordable to families earning between 30% and 60% of the area median income (AMI).
“We are very grateful to all our partners, especially to executive director Charles A. Richman and his entire team at the New Jersey Housing and Mortgage Finance Agency (NJHMFA) for moving this effort forward during such a challenging time for our industry and indeed our whole country,” said Jonathan Lubonski, vice president at Michaels and the lead developer on both phases. “We were able to accomplish the entire closing with all teams working remotely, moving documents both electronically and by mail, which was a first for NJHMFA.”
Each Energy Star-certified unit will include a full kitchen, living and dining areas, and a balcony/patio with an outdoor storage closet. Residents of the second phase will have access to an existing community center with management offices, a laundry facility, a community room with a warming kitchen, and a tot lot playground, which were created during phase one.
In addition, Michaels will preserve 6 acres of woodlands that will remain a natural green area restricted from future development. As part of the first phase, it actively reforested this area with 2,500 tree and bush saplings. This reforestation effort will continue as part of the second phase.
Construction is expected to be completed in early summer 2021. Financing includes $3.9 million in low-income housing tax credit (LIHTC) equity from Berkadia, as well as $8.2 million in bond financing issued by the NJHMFA. An additional $8.6 million was provided through the state’s disaster recovery fund.
General contractor Michaels Construction expects to break ground soon since affordable housing has been deemed essential in New Jersey during the pandemic. Other team members in this development include Michaels Management, who will serve as property manager, and Kitchen & Associates, the master architect.
On the other side of the country, Michaels closed on the financing at the end of March and soon will break ground on the third phase of the Jordan Downs redevelopment in Los Angeles.
Located in the Watts neighborhood, this is the latest milestone in the comprehensive redevelopment of Los Angeles’ largest public housing community by the Housing Authority of the City of Los Angeles (HACLA) with partners Michaels and nonprofit BRIDGE Housing.
The $58 million Phase S3 development will provide 92 new apartments for households earning between 30% and 80% of the AMI.
“The unprecedented collaborative efforts of HACLA, residents, community stakeholders, and our financial partners, along with the strong leadership of political officials at the local, state, and federal level continue to drive exciting milestones in the transformation of Jordan Downs,” said Michaels vice president of development Kecia Boulware. “We are incredibly grateful to be able to keep moving forward, even during this most difficult time for California and our nation.”
When the Jordan Downs redevelopment is complete, the original 700 World War II-era units of public housing will be replaced by more than 1,400 homes for new and existing residents, as well as new commercial and retail spaces, a new community center, and over 9 acres of open green space.
Phase S3 will be LEED certified, with a target of gold certification. The building will have a solar photovoltaic array designed to offset all the common area and central hot water heating for the development.
Financing for Phase S3 includes LIHTC equity from Berkadia and permanent loans through Freddie Mac, the state’s Affordable Housing and Sustainable Communities program, and HACLA. State funding includes discounted transit passes for residents and a job training partnership. Phase S3 also will incorporate rental subsidies through project-based Section 8 contracts and the Rental Assistance Demonstration program.
Construction is expected to be completed in a little under two years. Team members include general contractor Walton Construction, property manager Michaels Management, FSY Architects as design lead and architect of record, Partner Energy as the sustainability lead, and Breen Engineering as lead engineer for civil and off-site improvements.
