BOSTON – August 18, 2022 – MassHousing has closed on a total of $40.8 million in financing to Reed Community Partners LLC for the creation of Pac10 Lofts, a new, 180-unit affordable and workforce housing community in the Gateway City of Lawrence. Reed Community Partners has transformed a six-story section of the former Pacific Mills complex into new, mixed-income housing for households across a range of incomes, including 40 workforce housing units for moderate-income families.
"Pac10 Lofts is helping to fill a critical need for mixed-income housing in downtown Lawrence with the transformation of a vacant mill property into a vibrant, new housing community that is offering its residents housing stability and economic opportunity," said MassHousing Executive Director Chrystal Kornegay. "MassHousing commends the city, Reed Community Partners, and the many other project partners for their determination in completing this important new housing community."
Pac10 Lofts has been completed and is expected to be fully leased by year's end. The project experienced significant construction delays due in combination to the COVID-19 pandemic, the September 2018 gas explosions in the Merrimack Valley, and multiple water leaks that damaged more than half of the completed units and resulted in a long insurance claim process.
"This has been an unexpectedly long adventure, but we stayed on the horse," said Scott Reed, Managing Partner of Reed Community Partners. "This was our first project in Massachusetts, and nowhere in the country have we found a more mission-focused public agency than MassHousing. From beginning to end, they remained committed to doing whatever it took to ensure this project brought 180 units of high-quality affordable housing to Lawrence. That's what we delivered. Our team looks forward to working together on Phase II, and on many projects to come."
MassHousing provided $17.8 million in tax-exempt permanent financing, an $18 million tax-exempt bridge loan, and $5 million from the Agency's Workforce Housing Initiative. Other financing sources included $28.8 million in tax credit equity from an allocation of federal Low-Income Housing Tax Credits by the Massachusetts Department of Housing and Community Development (DHCD), $2.5 million in State Historic Tax credit equity, $43.3 million in construction financing from Sterling Bank and Trust, a $3.6 million acquisition note, $3.2 million in developer financing, $210,000 in CDBG financing from the City of Lawrence, and $175,000 from the Massachusetts Clean Energy Center. The tax credit investor was Affordable Housing Partners, Inc., an affiliate of Berkshire Hathaway.
Of the 180 new apartments, 18 are reserved for low-income households earning up to 30 percent of the Area Median Income (AMI), 112 will be affordable to households earning up to 60 percent of AMI, 40 will be workforce housing units for households earning up to 80 percent of AMI. The project also has 10 unrestricted market-rate units. The area median income for a family of four in Lawrence is $114,000.
The redevelopment of Pac10 Lofts advances the Baker-Polito Administration's goal of creating up to 1,000 new workforce housing units affordable to middle-income households through MassHousing's Workforce Housing Initiative. Since the inception of the initiative in 2016, MassHousing has committed or closed workforce housing financing totaling $146.9 million, to 73 projects, located in 27 cities and towns, and advanced the development of 5,765 housing units across a range of incomes, including 1,566 middle-income, workforce housing units.
Pacific Mills, a former textile mill, was originally built in 1910. The Pac10 Lofts project on Methuen Street is the first phase of a two-phase redevelopment of the mill complex. The Pac10 Lofts offer 82 one-bedroom apartments, 10 two-bedroom apartments and 88 three-bedroom apartments. The development also includes a fitness center, event space, and a conference room on each floor.
MassHousing has financed 18 rental housing communities in Lawrence totaling 2,245 housing units with an original loan amount of $210.4 million. The Agency has also provided $156.9 million in financing to 1,556 Lawrence homebuyers or homeowners.
About Reed Community Partners LLC
Reed Community Partners is a fully-integrated project management and real estate development firm, primarily focused on mid to large-scale affordable multi-family properties. Reed Community Partners is focused on financial structures that “twin” tax credit subsidies. In 2008, Reed Community Partners began undertaking the adaptive reuse of large, urban historic buildings using federal and state historic rehabilitation tax credits (HTC). In 2014, Reed Community Partners closed its first twinned tax credit transaction using new markets tax credits (NMTC) in addition to state and federal HTC to rehabilitate the 20-story Thomas Jefferson Tower in Birmingham, Alabama. In recent years, the firm has become increasingly focused on the production of high-quality affordable housing utilizing low-income housing tax credits (LIHTC) twinned with other tax credits and often including private activity bond financing (PAB). In addition to rehabilitating large historic buildings, the firm also specializes in mid-sized urban infill in key markets, working with localities to transform sites that have long been underutilized across the United States—from the Bay Area to the Gulf Coast to New England. For more information, visit www.reedcommunity.com.
MassHousing (The Massachusetts Housing Finance Agency) is an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts. The Agency raises capital by selling bonds and lends the proceeds to low- and moderate-income homebuyers and homeowners, and to developers who build or preserve affordable and/or mixed-income rental housing. MassHousing does not use taxpayer dollars to sustain its operations, although it administers some publicly funded programs on behalf of the Commonwealth. Since its inception, MassHousing has provided more than $27.5 billion for affordable housing. For more information, follow us on Twitter, Facebook and LinkedIn.