Annapolis,
Maryland
Admiral Oaks,
previously known as Boston Heights, was an extremely
troubled development prior to CPDC's acquisition and
redevelopment. Most of the problems could be attributed to
the previous owner who failed to fix code violations despite
legal action by the City of Annapolis. The apartments had
become a virtual war zone and became the housing of last
resort in Annapolis. In spite of these dire conditions, the
prior owner, when questioned by the City Council, stated
that he felt no responsibility to the residents of Boston
Heights. He saw it solely as well located real estate to be
bought and sold.
To save this property and preserve
it as affordable housing, the Community Preservation and
Development Corporation managed to acquire the property,
despite the competition, to revitalize it as housing of
first choice.
Property and Community
Profile
Admiral Oaks is a 159-unit community comprised of
two-bedroom town houses and flats, and two-, three-, and
four-bedroom garden apartments. It is located at the city
limits near the Annapolis Mall. CPDC utilized all available
wheelchair accessible and non-residential space as community
room space.
The property consists of a mix of
households, including 61% working families within incomes at
or below 60% of the Baltimore area median income and 39%
Section 8 qualified families. Today, CPDC can proudly say
that there is no longer an open air drug market at Admiral
Oaks and families live in a safe and secure community.
Financing Structure
The financing included tax-exempt bonds tied to the non-tax
credit eligible acquisition costs and taxable bonds for the
tax credit eligible costs (both issued by the State of
Maryland); a state funded soft third mortgage structured to
allow for the leaner start-up years; and equity raised
through a direct placement of Low-Income Housing Tax Credits
with Fannie Mae. Thirty-nine percent of the units have
project-based Section 8 subsidies and all of the units are
tax credit eligible. An operating deficit reserve funded
from cash flow during the first several years of operation
was created as a cushion for the property in the event the
Section 8 contract is not renewed upon expiration after 15
years. CPDC obtained the first payment in lieu of taxes
agreements from the City of Annapolis and Anne Arundel
County to mitigate the impact of the property tax increase
caused by the renovation.
Construction Management
CPDC substantially
renovated the property in 1991, managing the construction
process from planning through change orders. This included
hiring and directing the architect and engineer. A thorough
investigation of the condition of the property revealed
flaws, such as bellies in the sewer lines and fundamentals
causing erosion, which needed to be corrected during the
construction phase to assure long-term, sound housing. CPDC
works with the architect and general contractor on the
development budget. This property was vacated by the
previous owner prior to our purchase. The coordination of
the residents and the construction was focused primarily on
the need to occupy each unit as quickly as possible
following construction completion and the safety of the
residents occupying a property under construction. A fast
turn over from construction to occupancy was desirable to
maximize the tax credit value.
