SAN JUAN—The Puerto Rico Housing Department and McCormack Baron Salazar, Inc. (MBS), a national affordable housing developer, have closed on the financing on what will be marked as a major milestone in Puerto Rico’s affordable housing transformation effort
The public/private partnership leveraged private funding to revitalize the affordable housing site of Las Gladiolas in San Juan’s Hato Rey sector, which will bring $35.5 million in investment to the community, the agency announced Thursday.
The development will set the new standard for future affordable housing revitalization initiatives on the island, said local Housing Secretary Alberto Lastra Power.
“We are working to develop viable neighborhoods to enhance the quality of life for our residents and to provide opportunities for families and future generations to thrive,” Lastra Power said, adding that the pilot project represents Puerto Rico’s first affordable housing mixed-finance, mixed-income community.
“We are more than excited and proud to initiate construction on such a unique and historic development in Puerto Rico. Las Gladiolas will set a new paradigm for future affordable housing transformations,” said Vincent Bennett, president of MBS.
The site is located in the heart of the San Juan Central Business District and will consist of 140 newly constructed apartment homes offering one, two and three-bedroom rental units.
Construction is set to begin immediately on the 7-acre site and will be comprised of walk-up and townhome-style apartment buildings that will feature market-rate amenities and green energy-saving features to all residents with a variety of incomes.
The new community would connect to the larger neighborhood, providing residents access to job centers, transportation, schools and recreation. It will include state-of-the-art site amenities with onsite management space, as well as a community space with a fitness room and a business center for residents.
As a mixed-use development, this community will incorporate commercial space that is complementary to the residential development.
To develop a viable site for residents that promotes safety and encourages healthy living, the plans also include: integrated lighting, new utilities, landscaping with walking trails, youth play areas, community gardens and controlled-access parking.
“This is a one-of-a-kind development for Puerto Rico and offers the capacity on which to expand more opportunities for the future of San Juan and its central core. Offering first-rate comforts and conveniences, it will become a desirable place to live,” indicated Daniel Acosta, senior vice president of MBS and project manager.
To create a vibrant mixed-income development, this new community will house families with a range of incomes; of the 140 total units, 80% are affordable.
This financial closing marks the start of construction at one of three mixed-income public/private revitalization efforts. McCormack Baron Salazar has also been selected as the lead developer of affordable housing sites at Puerta de Tierra in San Juan and in Caguas.
MBS has more than 40 years of experience and is a leader in urban revitalization and transformation efforts throughout the United States and its territories, including the Virgin Islands.
A benchmark for the McCormack Baron Salazar team of experts is its application of creative financing in order to blend public and private funds to transform communities across the country; Las Gladiolas was no exception to this standard of financing technique.
The U.S. Department of Housing and Urban Development has committed significant funding for this project and the Puerto Rico Housing Finance Authority provided low-income housing tax credits. Alden Capital Partners provided the tax credit equity and Citi Community Capital serves as the construction lender.
Throughout the process the P.R. Department of Housing has been assisted by CVR Associates, a national affordable housing consulting firm, which has served as development consultant.
Álvarez-Díaz & Villalón will provide planning and architectural services. The general contractor for the redevelopment effort is F&R Construction Group.
McCormack Baron Salazar is the nation’s leading developer, manager, and asset manager of economically integrated urban neighborhoods. Since 1973, the firm has been an innovator of community development and urban revitalization in 42 cities, having built more than 19,700 high-quality homes for families, children, seniors and veterans.