Part 1: New Mixed Use Development Jump Starts Woodward Corridor Initiative
Construction for a unique, mixed-used real estate development in Midtown Detroit is underway, becoming the first project financed as part of the Woodward Corridor Initiative, and the first to close nationally deploying funds from the Living Cities Integration Initiative. NCB Capital Impact provided a $3.7 million leverage loan as part of an $8.4 million NMTC transaction to make this project possible.
The development, called The Auburn, is a 56,000-square foot commercial and residential facility in the heart of Midtown Detroit, one of the few growing parts of the city. The project symbolizes both the city’s enormous potential, as well as the continued growth and revitalization of Midtown. “The Auburn is pivotal development in the growing Midtown Detroit neighborhood,” said James Van Dyke, vice president of development for the Roxbury Group. “[It will add] much needed residential and retail space to currently underserved market.”
The Auburn will transform a vacant property into a neighborhood hub, providing affordable rental space targeted to the young professionals and students who live in Midtown.
• Commercial impact. The ground floor will have approximately 9,100 square feet comprised of up to 11 retail spaces available for rent, averaging 829 square feet. The Auburn seeks to attract small, local retailers that will appeal to the neighborhood’s young demographic. Niche retailers such as The Bureau for Urban Living and cafes such as Avalon Bakery, both located just a few blocks away, are examples of the types of tenants the Auburn will seek. The Detroit Investment Fund has guaranteed the commercial lease.
• Residential impact. The second and third floors will have a total of 35,664 square feet of residential space, with each floor containing 23 market rate and six income-restricted one-bedroom apartments averaging 615 square feet. The residential units will be marketed towards young professionals working at the area anchor institutions. There will also be 97 onsite parking spaces, with a dedicated space for each residential unit as well as 39 additional spaces that will be rented out to the general public, creating additional commercial revenue for the project.
In addition to Capital Impact’s support, the deal was made possible by Partners for the Common Good’s $500,000 participation in the leverage loan, as well as a $1 million grant from the Michigan State Housing Development Authority. “We are grateful to the Capital Impact team for their perseverance and creativity in funding this important and complex project,” said Roxbury Group’s Van Dyke.
Part 2: Vacant Building in Disenfranchised Neighborhood to Become Charter School
A vacant building in a historic Detroit neighborhood is being resurrected as the Henry Ford Academy, a 58,000-square foot charter elementary school that will bring high-quality education to 360 students in grades K-5, thanks to $10.8 million in New Markets Tax Credit (NMTC) Financing provided by Capital Impact.
Originally constructed in 1908, the building was once a Detroit Public School (DPS) property and is located on the outskirts of the historic Boston Edison neighborhood just west of the North End neighborhood included in the Living Cities Integration Initiative. The North End has been severely disinvested in recent years, as evidenced by a large number of vacant and burned-out houses and a number of DPS closings.
The new charter school will primarily serve students from the North End, who will have an automatic place in Henry Ford Academy: School for Creative Studies (HFA:SCS) Middle School located in the Argonaut, another facility for which Capital Impact provided financing. Approximately 72 percent of current HFA:SCS students qualify for free or reduced price lunch. The project will create approximately 37 construction jobs, as well as 30 full-time and 8-12 part-time permanent positions at the school.
“Henry Ford Academy: School for Creative Studies will provide a high-quality public school option for children in the North End and will bring a historic school building back to life,” said Ian Wiesner, loan officer for Capital Impact. “This is exactly the type of investment the North End needs to once again become a vibrant and thriving community.”
This project would not have happened without the generous support of the Thompson Foundation, and the NMTC equity investment from JP Morgan Chase.