$40 million total transaction includes an estimated $4 million in planned renovations; State Housing Commissioner Tingerthal praises acquisition for preserving affordable housing in Twin Cities
Minneapolis – Sept. 21, 2017 – State Housing Commissioner Mary Tingerthal today announced that more than 400 low-income families, including approximately 200 preschool children and 250 school-age students, will no longer face potential displacement from their homes following the $36 million purchase of the 422-unit Seasons Park Apartment affordable housing complex in Richfield by Minneapolis-based nonprofit Aeon and The Community Development Trust (CDT).
“Today is a great day for Minnesota and for the City of Richfield as we are all well aware of the critical need for affordable housing in the Twin Cities,” Tingerthal said during a press conference at the Seasons Park community room to celebrate the acquisition.
“I am confident the Aeon-CDT partnership is going to be a great collaboration between two outstanding companies because they understand the importance of how affordable housing and quality schools fit within the social fabric of a community,” she said. “Most important, the people who live here can now enjoy the peace of mind that comes with knowing they can afford to continue calling Seasons Park their home.”
Tingerthal also read a prepared statement issue by Minnesota Lt. Gov. Tina Smith: “Nearly 30 percent of all Minnesotans lack quality affordable housing. I thank Aeon, The Community Development Trust, and the City of Richfield for ensuring that Seasons Park Apartments remain an affordable choice for more than 400 families. Governor Dayton and I will continue to prioritize investments in housing. As a state, we must do more to ensure all Minnesotans have a safe, affordable place to call home.”
Among the dignitaries attending the press conference were Richfield Mayor Pat Elliott, City Councilmember Michael Howard, City Councilmember Maria Regan Gonzalez, Richfield Public Schools Superintendent Steven Unowsky, Aeon President and CEO Alan Arthur, CDT President and CEO Joseph Reilly, Hennepin County Commissioner Debbie Goettel, as well as Seasons Park Apartments residents with children whose homes are now secure.
“The sale of the Seasons Park Apartments to Aeon and CDT is a tremendous achievement,” Unowsky said. “Along with Gov. Dayton, Lt. Gov. Smith and Richfield city leaders, we feared the sale of this property to another potential buyer would have forced the displacement of virtually all the current residents, including approximately 250 students who attend our schools. Their departure would have been devastating to the Richfield Public Schools system.”
The approximately $40 million total transaction, which includes an estimated $4 million in planned renovations, marks the largest acquisition in the 31-year history of Aeon, a nonprofit developer, owner and manager of affordable housing in the Twin Cities. The purchase also represents the second-largest deal in the 18-year history of CDT, a national investor in affordable housing.
Since 2000, the number of Minnesotans considered cost-burdened by housing has increased 69 percent, forcing people to choose between paying rent or paying grocery, medical and child care bills, noted Aeon President and CEO Alan Arthur.
“That’s why Aeon aggressively pursued Seasons Park Apartments,” Arthur said. “Our goal was to stem the tide of affordable housing properties being gobbled up and converted into high-rent apartments out of reach for the average family. This purchase with The Community Development Trust serves as a model for how other communities in Minnesota and across the country can work together to make housing more affordable.”
In addition to Aeon and CDT, the City of Richfield Housing and Redevelopment Authority allocated $150,000 to help finalize the purchase. Officials with Hennepin County, Minnesota Housing Finance Agency and the Federal Home Loan Bank also are considering requests to provide further funding related to the acquisition.
“CDT is proud to be partnering with Aeon in this acquisition, which will ensure that Seasons Park remains affordable and will be maintained as high-quality housing for its residents for the foreseeable future. CDT’s decision to make such a significant investment was primarily based upon on Aeon’s longstanding commitment to the Twin Cities region and its strong relationship with state and local funding partners, all of whom share our desire to preserve Seasons Park as affordable,” said Reilly.
“Aeon and CDT could not have completed the successful purchase of the Seasons Park property without a broad-based consensus from all the parties involved that this is the right decision for preserving affordable housing in Minnesota. This strong level of commitment, through a public/private partnership, demonstrates the determination of the Twin Cities-area government and education leaders to improving their communities,” Reilly added.
The Twin Cities is in an apartment construction boom, but just 10 percent of new units will be available for low-income renters, according to the 2017 report “State of the State’s Housing Report, Twin Cities Region,” released by the Minnesota Housing Partnership (MHP). Existing affordable housing stock is also being purchased and renovated into higher-rent housing. In 2016, only 1,050 new units of affordable housing units were created in the entirety of Minnesota, MHP’s data show.
“All people deserve housing that is safe, stable, and affordable – it’s the foundation we depend on for our quality of life and opportunities to succeed,” said Councilmember Howard. “Aeon and CDT’s purchase of Seasons Park shows us that when we work proactively to prioritize families whose housing is at risk, we have the power to change lives for the better.”
“I thank Aeon and The Community Development Trust for this landmark achievement for our city,” Councilwoman Regan Gonzalez said. “Housing costs keep rising faster than incomes, especially for lower-income people, so I know we in government need to be more nimble and creative in how we make resources available for affordable housing in order to replicate the Seasons Park success story.”
Aeon is a responsive nonprofit developer, owner and manager of high-quality affordable apartments and townhomes that serve 6,000 people in the Twin Cities area each year. For more than 30 years, Aeon has been committed to helping people create a home where they feel safe and connected to the community around them. Aeon believes that Home changes everything. For more information, visit aeonmn.org.
The Community Development Trust (CDT) is a real estate investment trust that provides capital for the preservation and creation of affordable housing and charter school facilities. Working with local, regional and national partners, CDT makes long-term equity investments and originates and acquires long-term mortgages. In its 18 years, CDT has invested over $1.4 billion in debt and equity capital to properties in 44 states and regions – helping to preserve and create over 40,000 units of affordable housing. CDT is a private real estate investment trust (REIT), a certified Community Development Financial Institution (CDFI), an approved Fannie Mae affordable housing lender and a member of the Federal Home Loan Bank of New York (FHLBNY). As a CDFI and private REIT with a social impact mission, CDT operates as a double-bottom-line organization by utilizing creative financial solutions to provide debt and equity capital to underserved real estate markets, all while seeking attractive returns for shareholders.