Center Street Apartments Bought from Mayflower by Non-Profit Indelible Housing Inc.
Once Threatened Workforce Housing to be Preserved in Face of Record Needs
Made Possible by USDA Financing and Charitable Contributions
Center Street Apartments: 506- 510 Center Street
Indelible Housing Inc. closed Sept. 30, 2021, on the acquisition of the 12-unit Center Street Apartments complex at 506-510 Center Street. The property was transferred to Indelible by local seniors housing provider Mayflower Homes, Inc., which collaborated closely with the buyer to ensure the preservation of this 12-unit USDA-financed workforce housing complex occupied by moderate income families.
Center Street Apartments, first built in 1980 by Ramsey Weeks interests and owned by Mayflower since 2004, sits on a 31,493 square foot land parcel once owned by City of Grinnell founder JB Grinnell. In 1854, JB Grinnell sold this land to Iowa College of Davenport as part of a plan to move that academic institution to the City Grinnell and rename it Grinnell College.
For 17 years, Mayflower owned and operated, through third party management companies, this important workforce housing resource on the west side of Grinnell near Lake Arbor. However, in recent years the aging of the property’s roofs, windows, HVAC, kitchens and baths prompted Mayflower – whose core mission is senior housing — to transfer the property to a new owner with expertise in affordable housing rehab and preservation. As such, Steve Langerud of Mayflower brought multi-family developer Dick Knapp — a Washington D.C. based 1976 graduate of Grinnell College — to buy the property. (Prior to this closing, Langerud worked out a deal with USDA and Indelible to allow Indelible to invest $175,000 loan in Center Street to renovate 5 of the 12 Center Street units in order to ensure they could remain marketable.
Knapp, as a sideline to his D.C. activities, has been buying and repositioning properties around Grinnell’s historic central square, creating loft apartments, the Prairie Canary restaurant , downtown college office space, and various boutique stores. In 2018, he formed Indelible Housing Inc. http://indeliblehousing.org/ , a 501 (c)(3) non-profit that buys, renovates, and owns threatened HUD and USDA multi-family communities. Center Street Apartments is part of Indelible’s $75mm portfolio of affordable communities concentrated in Iowa, Missouri and Pennsylvania.
With the transfer of Center Street Apartments, Indelible will complete a $54,000 per unit modernization of the property. The renovation scope includes new kitchen appliances, countertops, cabinets and flooring; completely new bathrooms; new windows and siding; new entrances and lighting; landscape and play area improvements; refurbished common areas and laundry rooms; HVAC replacements, and an eventual roof replacement. Indelible also voluntarily agreed to a $80,000 renovation to convert one unit to a fully accessible dwelling unit, along with wheel chair accessible routes, in compliance with the Uniform Federal Accessibility Standards and American for Disabilities Act.
The demand for affordable housing is at record levels in Grinnell and its surrounding counties, as upward pressure on the overall housing market has created a city-reported waiting list of over 500 persons, as well as a growing homeless population.
To finance the acquisition and renovation, Indelible stitched together financing from various public and non-profit sources: assumption of $152,000 of USDA debt that Mayflower Homes, Inc. owed to USDA; an additional $448,000 loan to Indelible from USDA; a generous contribution from the Brownell Family Foundation; and Indelible Housing Inc. equity.
Indelible hired a local development team for the Center Street repositioning: the general contractor for the renovation is Craig Cooper’s Cooper Construction Services; the property manager is Karen, broker/owner of McNaul Real Estate; the project architect is Robert H. Warner of Cedar Rapids, and the real estate attorney is Tom Lacuna, assisted by USDA special counsel Tyler Ramsey of Dexter, Mo.
Completion of the renovation is scheduled for June 1, 2022. One of the 12 apartment units is already vacant due to a rare move-out, and as such this unit will be the first renovated. There will be no disruptive relocation of tenants, as the plan is to move residents from their current, unrenovated unit to a newly renovated unit sequentially over the 8 month rehab duration.
Rents for the two-bedroom units (as well as one accessible 1-bedroom unit) will be on average $344/month, which figure includes tenant paid electric bills for heating/AC, hot water, and plug-ins. The market rent for these Center Street families would otherwise be $700/month, based on market- comparable rents for 40 year old, renovated properties in the City of Grinnell similar to Center Street Apartments.