Aeon, a nonprofit developer and operator in the Twin Cities; The Community Development Trust, a national investor in affordable housing; and Minnesota Housing closed the $42.5 million refinancing of Seasons Park Apartments in Richield, Minnesota
The 422-unit property is located a few miles from the Mall of America and the Minneapolis-St. Paul International Airport. The new plan will help preserve long-term affordability for more than 1,200 residents at a time when developers are increasingly buying these properties to convert them into market-rate housing.
“Preservation is a critical component to meet Minnesota’s need for homes that are affordable,” said James Lehnhoff, Assistant Commissioner of Multifamily at Minnesota Housing.
“Minnesota Housing is pleased to support Seasons Park with a first mortgage and flexible financing to complete capital improvements and to keep the property affordable for years to come,” Lehnhoff said.
Aeon and CDT initially partnered on the acquisition of Seasons Park in September of 2017. The transaction required swift action to prevent the acquisition of the property by a market-rate investor and the potential displacement of hundreds of families. CDT and Aeon assumed the existing financing placed on the property by the prior owner, with the understanding that, to provide quality, affordable homes for the long term, Seasons Park needed an infusion of capital.
Now, after two years of work with the state housing agency, the team has closed on a $42.5 million refinancing plan from Minnesota Housing. The financing consists of a 35-year first mortgage of $34.5 million from the Low to Moderate Income Rental program and $8 million in subordinate financing from the agency’s Flexible Financing for Capital Costs program.
The closing of the Minnesota Housing financing will help Aeon provide long-term, quality affordable homes for 422 families earning 60 percent or less of the area median income. Before CDT and Aeon’s acquisition of the property, it was at risk of following the trend of market-rate “upscaling.” Market-rate investors have been purchasing aging properties, making modest improvements and increasing rents. This practice has displaced thousands of low-income Twin Cities residents from their homes.
Seasons Park residents are now protected from significant rent increases. The property will remain an affordable home for 1,200 residents in Richfield for years to come.
Improvements at the property began in August and will continue for three years. Work will include new roofs and landscaping, updates in laundry rooms and apartments (before new residents move in), and an updated playground area for the hundreds of children that call Seasons Park home.