CT/KDF COMMUNITY DEVELOPMENT PARTNERS ANNOUNCES FINANCING OF LANCASTER PROMENADE III
Financing to be Used to Redevelop Four Properties Along “Chirping” Boulevard
LANCASTER, CA – January 18, 2012 – (RealEstateRama) — Aliso Viejo, Calif.-based CT/KDF Community Development Partners, a joint venture between CT Realty Investors and KDF Communities, in concert with its investment partner, U.S. Bancorp Community Development Corp., has placed $16.15 million of its New Markets Tax Credit (NMTC) allocation with a subsidiary of InSite Development of Woodland Hills, Calif. The NMTC funds will be used to redevelop four properties along the new Lancaster Promenade, now known as The BLVD, in downtown Lancaster, Calif.
The BLVD is known for the calming sounds of bird chirping and singing, which have been piped in over 70 speakers for the past several months. The bird chirping, blended with calming synthesized music, is played five hours a day along a half-mile stretch of the boulevard. The piped-in music was the brainstorm of Mayor R. Rex Parris, who says that the chirps have a calming effect on the local population. The chirps are being paid for, in part, through InSite’s previous NMTC financings for the turnaround of Lancaster’s blighted downtown area.
Lancaster Promenade III represents the third phase of InSite’s commitment to the city’s redevelopment, a metamorphosis that would have been impossible without subsidy from the NMTC program. This critical third phase involves the acquisition and redevelopment of an office/retail building, conversion of a former church into a community building for the city, new construction of a retail/office building, and new construction of a downtown parking structure. In addition, solar photovoltaic panels will be installed on several neighboring multifamily properties, and more than $6 million of street and traffic improvements will be completed as part of the city’s plan to create a downtown Lancaster destination.
Lancaster Promenade III is a vital component of the overall revitalization effort along a one- mile stretch of West Lancaster Boulevard, the heart of the city’s downtown. The project is being completed in close coordination with the City of Lancaster and is designed to fulfill the goals of community revitalization and blight elimination, as well as the creation of an attractive destination and a walkable, safe downtown.
A crucial aspect of this project is InSite’s commitment to invest in locally-based, resident entrepreneurs who create and own their own businesses that service and employ the immediate community. This local “incubator” technique has proven very successful in the first two phases of Lancaster Promenade I and II. Promenade III will also feature numerous executed leases with resident entrepreneurs who work closely with InSite in design, execution and operation of the local business.
With its original commitment to downtown Lancaster, InSite set up a program to identify local, small business operators who have a specific talent such as making cupcakes or running a deli. InSite provides ongoing training, accounting and marketing to the small businesses and reviews the books each month for every business. Businesses that have opened along The BLVD include an authentic Jewish deli, a family-style restaurant with an underground bowling alley, a cupcake shop, yogurt shop, candy store, clothing boutique, and a state-of-the-art movie theatre.
CT/KDF’s financing of Lancaster Promenade III was generated through the company’s NMTC allocation from the federal government. CT/KDF received $90 million in late 2006 from the Community Development Financial Institutions Fund (CDFI) of the U.S. Treasury Department for investment in distressed areas.
“The federal New Markets Tax Credit program is targeted toward investment in new construction or substantial rehabilitation of properties in low-income areas,” said Sarah Woodward, chief investment partner for CT/KDF. “Compared to conventional, market-rate financing – especially financing for distressed areas – NMTC money is very attractive and may be the only financing available for a worthy project in a lower-income neighborhood. The Lancaster Promenade project is truly the “poster child” for what this program is all about – re-gentrifying blighted areas and putting small entrepreneurs into business. This project will make us all proud for years to come.”
The Lancaster financing is CT/KDF’s seventh transaction using its NMTC allocation, and successfully completes the company’s initial deployment of its original NMTC funds.
Upcoming financing opportunities for the CT/KDF team will come from approximately $37 million of investment power stemming from funds that have been returned to the company that are now available for reinvestment in worthy Southern California projects. Woodward said, “This is a unique pot of NMTC allocation that is especially attractive for ground-up construction or project repositioning opportunities. The funds come with an exceptionally low front-end cost, and only need to stay invested for three to four years.”
For more information, please visit www.ctkdf.com or contact Sarah Woodward at 714/544-9930.
Since its establishment in 1994, CT Realty Investors has completed more than 200 transactions with value in excess of $2.5 billion through a series of 10 independent discretionary private equity real estate funds, and continues to invest in institutional quality industrial properties, debt instruments, multi-family properties and other income-producing assets. The focus of CT Realty’s investment activities is to acquire well-located assets in major markets with the potential to enhance their value through a solid, hands-on management approach. For further information, contact Carter Ewing at CT Realty Investors at 949/330-5777 or visit www.ctrinvestors.com.
Contact:
Donna Hahn
Hahn Communications
(949) 458-3983
donna (at) hahnmarketing (dot) com