The Community Builders, Inc. (TCB), a leading nonprofit developer of mixed-income housing, has announced its acquisition of 19 distressed multifamily properties in various Cincinnati neighborhoods from the Federal National Mortgage Association (FNMA). The portfolio purchase, which includes 618 apartments, was executed on Nov. 15 for $10.6 million. The deal is the first step in a multi-year preservation and improvement plan developed by TCB as part of the Cincinnati Multifamily Housing Consortium (CMHC). The CMHC, a local 20-member collective, was formed to address the troubled property portfolio that fell into foreclosure in 2010.
“I am delighted to announce TCB’s newest investment in Cincinnati’s neighborhoods,” said Terri Hamilton Brown, TCB Midwest regional director. “This acquisition is the start of a long-term commitment to stabilize and transform these distressed properties for the benefit of the families who live in them, as well as their neighbors.”
Located in scattered sites in the Avondale, Walnut Hills, Over-the-Rhine, Paddock Hills, Sedamsville and Madisonville neighborhoods, the 19-property portfolio includes 36 buildings that range in size from two to 68 units. A 20th property in the foreclosed portfolio, located in Dayton, was not acquired by TCB.
The newest buildings in the portfolio were constructed in the early 1970s. The oldest buildings date back to the late 1880s. All of the sites, which house over 1,200 people, have fallen into severe disrepair after years of neglect by previous owners.
The Cincinnati portfolio purchase was funded in part by a loan from the Neighborhood Stabilization Program 2 (NSP2) grant TCB received from the U.S. Department of Housing and Urban Development (HUD) in 2010 to mitigate the community impact of foreclosed homes in multiple cities across the country.
“TCB has the resources and talent necessary to execute the long-term, large-scale turnaround these properties desperately need,” said Brown. “We are committed to advancing our mission to build and sustain strong communities for people of all incomes here in Cincinnati.”
TCB has also been named as a finalist for a 2012 HUD Choice Neighborhoods Implementation Grant, together with the Cincinnati Public Schools and the Urban League of Greater Cincinnati, to fund employment, health, education, and leadership training for residents in Avondale. This proposal builds on years of planning by the Avondale Community Council, LISC Greater Cincinnati & Northern Kentucky, and Avondale Comprehensive Development Corporation.
All residents have been notified of the ownership change for their apartments. TCB is conducting a thorough assessment of every unit that will be complete by early 2013. Following the needs assessment, critical property improvements, such as functioning unit heating, exit signs and smoke detectors, will be implemented in the first quarter of 2013. Over the long-term, TCB is committed to improving the entire portfolio planning to own and redevelop some of the portfolio properties and rehabilitate others for sale. Implementation of the portfolio plan is expected to occur in phases over the next three to five years, depending on project financing. TCB currently owns and manages the City West, an award-winning mixed-income development in Cincinnati’s West End, with 680 units and over 1,400 residents. Recently, City West received $6 million from new investors and lenders to reinvest in this development.