Richfield, Minn. – Aeon, a nonprofit developer and operator in the Twin Cities, The Community Development Trust (“CDT”), a national investor in affordable housing, and Minnesota Housing announced today the $42.5 million refinancing of Seasons Park Apartments.
The 422-unit property is in Richfield, 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 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 exhaustive 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.
Today’s announcement was hailed by long-time Seasons Park residents for providing them with the peace of mind that they can continue to afford to remain in the place they’ve called home for the foreseeable future.
“Seasons Park has been my home for over 12 years, and I am so excited and happy to see the new improvements happening in my building and the community,” said Patricia Nava, who has resided at Seasons Park since July 2008.
“I appreciate the great service provided by the new staff and all the efforts that are being made to maintain the community,” Nava said.
The closing of the Minnesota Housing financing will help Aeon provide long-term, quality affordable homes for 422 families earning 60% 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.
“CDT is proud that our partnership with Aeon was able to reach this great result for the residents of Seasons Park,” said Brian Dowling, Chief Investment Officer at CDT. “Minnesota Housing has been a great partner throughout the process and we are very pleased to obtain long-term financing that will provide financial stability for the property and ensure peace of mind for the residents that Seasons Park will remain affordable for the long-term.”
“We are deeply grateful for the partnership of Minnesota Housing and CDT,” said Aeon President & CEO Alan Arthur. “This investment in Seasons Park is an important step to ensure this property not only provides affordable housing, but 422 quality homes in Richfield.”
Richfield Mayor Maria Regan Gonzalez praises Aeon’s persistence in finding resources to make physical improvements to the apartment community, which had years of deferred maintenance to address.
“The City values Aeon’s willingness to partner in helping to preserve and improve the Seasons Park community for our residents,” Gonzalez said. “The families who live here, and the entire Richfield community, will benefit greatly for having a safe, affordable and quality place to live.”