UNDER EMBARGO UNTIL WEDNESDAY, JUNE 17, 2015, 8AM EST
CPDC, D.C. Mayor Muriel Bowser, Federal and District Housing Leaders to Kickoff Revitalization of Long-standing Edgewood-Brookland Affordable Housing Community
SILVER SPRING, MD (June 17, 2015) – Leading Mid-Atlantic not-for-profit developer Community Preservation and Development Corporation (CPDC) today announced plans to transform its Edgewood Commons (formerly Edgewood Terrace) community in the fast-gentrifying Edgewood-Brookland neighborhood of Northeast D.C. With Phase I of renovations complete and a second phase of improvements underway, CPDC will celebrate these milestones on June 17 with keynote addresses by Washington D.C. Mayor Muriel Bowser, United States Department of Housing and Urban Development (HUD) Deputy Assistant Secretary Benjamin T. Metcalf, and Ward 5 Councilman Kenyan McDuffie.
Once hailed the ‘Disneyland of Affordable Housing,’ Edgewood Terrace (rebranded Edgewood Commons in 2014) is currently being transformed into an open, vibrant, engaged, mixed-income community. Over the next five years, CPDC will invest upwards of $50 million to ensure the property remains competitive with new development in the area and to continue work with residents to shift the culture at Edgewood.
“We know that even more important than physical renovations, communities thrive when residents are invested and take ownership in the place they call home,” said Pamela Lyons, Senior Vice President, Resident Services at CPDC. “Our inclusive approach to resident engagement has spurred a cultural transformation at Edgewood—one of asset-based community building, organizing, and engagement.”
The Significance of this Development
Edgewood Terrace – once one of the largest open-air drug markets in the District in the early 90s – saw its first redevelopment 20 years ago when CPDC acquired the failed properties and brought in a range of programs, activities, and services onto the campus. Edgewood placed CPDC on the map as the first wired affordable housing community in D.C. that offered free Internet access to residents, an effort made possible through a substantial investment by Microsoft Corporation. Edgewood was also widely publicized because of early investments by companies such as Citibank and Enterprise Foundation.
HUD has enjoyed a long history with the Edgewood community, beginning in the 1970s with the original redevelopment of the site, by providing funding for the creation of 792 units of affordable housing. HUD’s involvement continued into the 1990s by assisting with CPDC’s acquisition of Edgewood I and the financing of Edgewood III, one of the first Section 202/Low Income Housing Tax Credit (LIHTC) mixed financing developments in the nation. That partnership continues through the provision of Section 221(d)4 financing, in conjunction with Red Capital Group, to allow CPDC to preserve and position the property as an affordable housing resource into the future.
“We are proud to join CPDC in the transformation of this community,” said Benjamin Metcalf, HUD’s Deputy Assistant Secretary for the Office of Multifamily Housing Programs. “CPDC’s vision for and investment in the community will create better living spaces and opportunities for thousands of residents that call Edgewood home.”
Today, in the face of rapid gentrification throughout the region, CPDC’s approach to economically diverse housing helps prevent the displacement and disruption of long-rooted community members. The EdgewoodBrookland community is a prime example of a neighborhood rapidly gentrifying as investors import new retail, market-rate apartments, and entire arts districts. The Edgewood Commons income-affordable community is home to hundreds of families that were in jeopardy of being displaced; that was before CPDC took action to preserve affordability at a property where income restrictions were set to expire in a few years.
“Edgewood Commons is a shining example of how long-standing, historic communities and their residents can adapt and grow with their surrounding neighborhoods—even during change and gentrification,” said CPDC President and CEO J. Michael Pitchford. “The revitalization of the Edgewood community represents a significant ‘win’ for affordable housing in the District and ushers in the next era of progressive, innovative, mixed income housing strategies.” Pitchford points to the importance of resident-led initiatives, local partnerships, and community development as integral to the current and future success of Edgewood.
Phase I: Completion of Edgewood Commons IV
In 2014, CPDC completed renovations of Edgewood IV, a 258-unit mid-rise building acquired in 2001. This transaction represented the launch of an extensive reinvestment strategy at CPDC’s flagship property.
- Financing: CPDC’s two-stage approach to financing Edgewood IV called for 1) a refinance of the high interest rate debt on the property through a $16.5 million FHA insured loan through RED Capital. This generated over $2 million for repairs to the property, all while maintaining the current rent structure. 2) After the end of the compliance period, CPDC plans to use LIHTCs to finance more extensive improvements and preserve affordability.
- Renovations: During this refinance, CPDC improved the building’s interior and exterior common areas including an upgraded community room, a modern and expanded lobby, exterior painting, and more inviting outdoor spaces.
Phase II: Construction Underway at Edgewood Commons I
Initially purchased and renovated by CPDC in 1995, the Edgewood I section of the campus contains 292 apartments composed of a mid-rise and six garden apartment buildings containing efficiencies as well as one-, two-, three- and four-bedroom units.
- Financing: CPDC assembled a sophisticated, multi-layered financing package to finance Edgewood I. The package included $21.5 million in short-term tax-exempt bonds and 4% LIHTCs issued by District of Columbia Housing Finance Agency; a $31.7 million FHA-insured mortgage provided by RED Capital Mortgage; nearly $9.4 million in tax credit equity through Enterprise Community Investment; and an equity bridge loan of approximately $5 million provided by Enterprise Community Loan Fund. The Local Initiatives Support Corporation provided a $1.1 million loan to fund predevelopment costs.
- Renovations: CPDC closed on the recapitalization of Edgewood I in November 2014 and began renovations in early 2015. The substantial remodeling will include unit upgrades (e.g., new flooring throughout, new vanities in bathrooms, new cabinetry and countertops, more energy-efficient heating and cooling systems), lobby and common area improvements, and major exterior improvements including water features, a tot lot, a community garden, a fitness trail with interactive play equipment, and renovation of the parking garage.
- Affordability for a mix of incomes: Affordability for a mix of incomes: The Edgewood I property was originally acquired through an upfront grant from the Department of Housing and Urban Development (HUD) with deed restrictions that restrict incomes at or below 80% of area median income (AMI) through 2025. Previous affordability covenants from the Department of Housing and Community Development and the Federal Home Loan Bank had already expired. The new financing allowed CPDC to maintain all current income restrictions while creating a greater mix of incomes on the property. The new financing structure includes 114 units with HUD rental assistance for residents at or below 50% AMI; 91 units for residents at or below 60% AMI; and 87 units designated for residents between 61 – 80% AMI.
The June 17 revitalization celebration will be hosted by Radio One Director of News and Community Affairs Ebony McMorris, a former Edgewood Terrace resident. Also attending the event will be several 5E ANC commissioners, property funders and development teams, residents, community leaders, and local businesses.
Additionally, the event will mark CPDC’s official chartering by NeighborWorks of America, a national nonprofit organization providing financial support, technical assistance, and training for community-based revitalization efforts.
“NeighborWorks America is delighted to welcome Community Preservation and Development Corporation as a new member of the NeighborWorks network,” said Paul Weech, President and CEO of NeighborWorks America. “We are deeply appreciative of their work building vibrant communities and providing affordable rental housing in one of the most high-cost markets in the U.S.” For more information on the Edgewood Commons revitalization project or to see plans for the remaining phases, to be completed over the next three years, visit www.cpdc.org/ewcrevitalization.”
For more information on the Edgewood Commons revitalization project or to see plans for the remaining phases, to be completed over the next three years, visit www.cpdc.org/ewcrevitalization.
A premier developer of affordable housing in Washington, D.C., Maryland and Virginia, Community Preservation and Development Corporation (CPDC) works to develop vibrant communities through innovation and partnership. Specializing in the acquisition, redevelopment, and operation of affordable housing for low- and moderate-income individuals and families, CPDC owns over 4,500 dedicated affordable apartments within more than 25 communities, with resident engagement programs at many of its properties serving more than 9,000 residents.