US BANK PROVIDES $77 MILLION IN FINANCING FOR HISTORIC ARCADE BUILDING CONVERSION TO LOFT APARTMENTS
August 12, 2014 admin
ST. LOUIS, MO - U.S. Bank announced that it closed on several tax-credit financing packages of more than $77 million with Dominium, a leading apartment development and management company, to develop the century-old Arcade Building into a mixed-use space for university classes and 282 market rate and affordable-housing apartments.
The renovation of the 18-floor, 500,000-square-foot building at 800 Olive St. includes 202 affordable and 80 market-rate apartments, ranging from one to three bedrooms. The affordable-housing units are specifically designed to meet the needs of artists, offering one- to three-bedroom apartments as well as over 13,000 square feet of artist studio space.
“Tremendous persistence, commitment and a deep desire to support the emergence of downtown St. Louis as an arts and innovation community kept our team motivated to make this development come to fruition,” said Zack Boyers, chairman and chief executive officer of U.S. Bancorp Community Development Corporation (USBCDC). “The Arcade Building is in the heart of a now-thriving neighborhood that USBCDC is proud to have been working to reinvigorate for many years.”
Dominium plans to market the affordable housing units to artists, based on its record of successfully leasing loft space in the Leather Trades and Metropolitan Artist Lofts buildings in St. Louis and Schmidt Artist Lofts in the Minneapolis/St. Paul area.
“This is the third artist loft project in St. Louis that we have partnered on with USBCDC, and, without a doubt, no other investor in the U.S. would have made such a complex deal happen except them,” said Jeff Huggett, vice president and project partner for Dominium of Plymouth, Minnesota. “We are excited to provide the St. Louis region with a development that attracts artists to the area and gives them work and performance space to spur their creativity. Cities with flourishing artist communities attract other artists and new residents seeking a vibrant cultural environment. Our experience has proven that artist lofts are economic development drivers. ”
The Arcade’s first two floors and mezzanine of 55,000 square feet will be leased to Webster University for classes, a 170-seat auditorium, community kitchen and an art gallery. This expands the Webster University campus downtown to 85,000 square feet from 33,000 square feet, including its presence in the Old Post Office.
Dominium projects that Webster University will be able to move in as early as December 2015 and construction on the remaining space will finish in January 2016. The renovation is a major part of the much-desired redevelopment of the Old Post Office Square.
“Redevelopment of the historic Arcade Building wouldn’t have been possible without the partnership of these organizations and the availability of tax credits, especially New Markets Tax Credits. Breathing new life into this century-old building will move the city forward in our goal of making downtown a hub of residential and commercial activity for the region,” said St. Louis Mayor Francis Slay.
U.S. Bank invested $77 million raised through its investments in federal New Markets Tax Credits, federal and state historic tax credits and a separate investment arranged from federal low-income housing tax credits.
U.S. Bank Community Lending Division provided a $44 million construction loan, partially bridging the equity provided by USBCDC. BMO Harris Bank provided bridge and permanent construction financing, Cornerstone Permanent Mortgage Fund (Boston Capital Finance) provided a permanent loan and the City of St. Louis provided a $4.8 million loan.
New Markets Tax Credits for the project were allocated by U.S. Bank, St. Louis Development Corp., Enterprise Bank & Trust, National Trust Community Investment Corp. and Central Bank of Kansas City. The low-income housing credits were allocated by Missouri Housing Development Commission, which also provided a federal HOME loan and Affordable Housing Assistance Program tax credits.