The Atlantic Cos. has received a $24 million equity investment for the development of 702 Manufacturers Road, a 278-unit multifamily community located in downtown Chattanooga, Tenn. American South Capital Partners provided the equity financing, while Ameris Bank provided a construction loan. The project’s completion is slated for the fourth quarter of 2027.
Some $12 million in ASCP’s commitment comes from its recently-launched American South Real Estate Fund III, which closed its first round at $60 million. ASCP, a joint venture of SDS Capital Group and Vintage Realty Co., provides preferred equity for the development and preservation of affordable and workforce housing in 10 Southern states.
When it comes online, 702 Manufacturers Road will offer studios, as well as one- and two-bedroom units. It will be the only multifamily community directly on the Tennessee River in Chattanooga’s Northshore neighborhood, providing access to a newly-built multi-use path in addition to a river launch pad for paddle boards and kayaks.
READ ALSO: Designing Wellness Into Affordable Housing
The 702 Manufacturers Road development will benefit from Chattanooga’s Payment-in-Lieu-of-Taxes program, which incentivizes putting affordable units in upscale projects. In exchange for tax savings, the developer will design 42 units as affordable, essentially functioning as workforce housing, according to the Atlantic Companies.
So far, American South Real Estate Funds I, II and III have committed approximately $217.4 million to 29 projects, supporting the development of 7,836 housing units. About four-fifths of those units are designated for families earning less than 80 percent of the area median income.
In another recent partnership in the South, ASCP joined forces with Woodfield Development for the land purchase of 840 Woodrow SW, a parcel in Atlanta. On the site, Woodfield will develop 840 Woodrow, a 326-unit mixed-use affordable community.
Navigating a housing affordability crisis
Like most cities, Chattanooga is facing a severe housing affordability squeeze. Over the last decade, the median residential rents in Hamilton County, which includes Chattanooga, have increased by 57 percent, according to the American Community Survey. That has left nearly 70 percent of Chattanooga renters either rent-burdened or severely rent-burdened.
PILOTs typically give private developers a discount on their property taxes in exchange for affordable rental units. Chattanooga’s is different from many other such programs in that it ties the tax abatement directly to the cost of providing the affordable housing units.
The post Atlantic Cos. Lands Equity for Chattanooga Project appeared first on Multi-Housing News.
Gillian Executive Search is a leader in Affordable Housing Development, Financing, Design and Construction recruiting. www.gessearch.com