Craven Terrace Phase I is a 131 unit apartment complex located in New Bern, North Carolina, built in phases during the 1940s. Since its completion, Craven Terrace Phase I has housed low and moderate-income in its 16 residential brick buildings on an 8.256-acre site. The physical condition of the buildings and grounds had deteriorated to the point where the entire property was in need of substantial investment to ensure it remained a viable source of affordable housing for many years to come.
Since its completion in the 1940s, the property has been owned and operated by the City of New Bern Housing Authority. Evergreen Partners has partnered with TCG Development and the New Bern Housing Authority to redevelop and revitalize Craven Terrace Phase I. In order to facilitate the rehabilitation of the property, the New Bern Housing Authority has transferred ownership to Craven Terrace, LP, a newly formed single purpose limited partnership entity. Affiliates of Evergreen Partners, TCG Development and the New Bern Housing Authority are members of the new ownership entity. Evergreen Partners and TCG Development control the managing general partner, while the New Bern Housing Authority participates in the partnership as a non-managing general partner.
The rehabilitation of Craven Terrace Phase I includes the property’s participation in HUD’s Rental Assistance Demonstration (RAD) Program. The RAD Program allows public housing authorities to secure project-based rental subsidies for properties that are undergoing substantial renovation through this program. Additionally, an allocation of 4% low-income housing tax credits from the North Carolina Housing Finance Agency (NCHFA) is being used to facilitate the renovation along with both State and Federal Historic tax credits.
The total development costs of the property are in excess of $13.6 million (MM). The acquisition and renovation will be primarily financed with new permanent debt from a $4.545MM loan, as well as a $1.66MM Purchase Note and a $500K grant from the Federal Home Loan Bank. Equity financing in an amount in excess of $6.4MM has been raised through the sale of 4% low-income housing tax credits and State and Federal Historic tax credits. Tax-exempt bonds issued by the City of New Bern will be utilized during the construction period to qualify the project to receive the 4% LIHTC. The tax-exempt bonds will be retired after construction completion with a portion of the permanent financing proceeds.
Renovations are currently underway at Craven Terrace Phase I and include approximately $57,000 per unit in improvements. Areas that will be addressed include deferred maintenance, basic capital needs, and modernizing the apartments to bring them up to today’s standards of housing. In addition, the renovation work will decrease energy consumption and associated costs of the property through implementation of the Enterprise Green Communities green building standards and the installation of new gas furnaces and outside A/C condensing units. The following items will be replaced as part of the renovation: kitchens, bathrooms, flooring, heating and cooling systems, hot water systems, lighting and windows. Upon renovation, the property will offer tenants many amenities including: a new community building which will incorporate new management offices, a computer learning center, a community room and kitchen.
The City of New Bern fully supports the renovation of this property and has acknowledged its preservation will help meet the City’s housing goals. Ongoing management of the property has been transferred to Preservation Management, Inc., Evergreen Partners’ affiliated Management Company who will provide full-time management services to the property. Preservation Management specializes in the management of income restricted and HUD subsidized properties and currently manages over 10,000 units in 18 states.
First Mortgage Financing: New debt financing via the Federal Home Loan Mortgage Corporation (“Freddie Mac”) Direct purchase of Tax-Exempt Loan Program was provided to the project by Prudential Affordable Mortgage Company, LLC.
Other Key Financing: In addition to the new First Mortgage Financing, the project utilized proceeds from a bridge bond provided by the Housing Authority of the City of New Bern, a rental finance note from the Housing Authority of the City of New Bern and a grant from the Federal Home Loan.
Equity Financing: PNC Bank N/A provided equity to the project from the sale of 4% Federal Low Income Housing Tax Credits and Federal Historic Tax Credits. Sugar Creek Capital provided equity to the project from the sale of State Historic Housing Tax Credits.
Section 8 Contract Renewal: Yes
Tax Credit Allocating Agency
North Carolina Housing Finance Agency
Local HUD Office
City of New Bern
Tax Exempt Bond Issuer
City of New Bern Housing Authority
First Mortgage Lender
Prudential Affordable Mortgage Company, LLC
Redevelopment and Management Partner
Housing Authority of the City of New Bern
TCG Development Services LLC
Federal Equity Investor/Partner
PNC Bank NA
State Equity Investor/Partner
Sugar Creek Capital LLC
Ross Deckard Architects
Mutual Builders Inc.