POAH - Preservation of Affordable Housing

The Preservation Challenge
Cutler Manor is a 220-unit family housing development located south of downtown Miami in the Cutler Bay region. Built in 1970, the property had undergone some modest renovations throughout the years, but was in need of a more comprehensive renovation scope.

POAH's Role
With the seller parent-entity entering bankruptcy, Cutler Manor and its sister properties were at risk falling into disrepair and losing their affordability. Cutler Manor, an over-leveraged asset with significant deferred maintenance, required a purchaser who could execute a complex transaction preserving the Section 8 subsidy, restructuring the existing debt profile, and implementing a capital improvement plan. Only with these three components could the property sustain a healthy future dedicated to affordable, family-housing. An important attribute of a successful purchaser in the high-tax area of Miami is being a non-profit. By Florida state-statute, non-profit owner entities of affordable housing developments are entitled to full tax abatements; a critical boost to operating income for these properties. With very few strong non-profits operating in the State of Florida, part of POAH’s decision to pursue these acquisitions was a desire to help strengthen the non-profit presence in Florida.

Stagnant bond markets and rising interest rates moved POAH from its original 501c3 bond execution to a conventional debt product with a shorter term and lower interest rate. Because of the tax abatement that follows non-profit ownership, POAH never sought to syndicate this deal, a circumstance that proved to be an unplanned blessing as the equity investor market also failed leaving many four-percent tax credit transactions unclosed in 2008.

POAH’s $4M rehabilitation scope will serve to improve the individual units, the major building systems, and the curb appeal. The scope of work includes new roofs, a new playgrounds, improvements to the site and landscape, a new playground, and unit improvements. Additionally, POAH again has partnered with One Economy to bring wireless internet to this property. With a large number of children on this property, POAH will work with service providers to bring resources to the property.

10875 SW 216th Street Miami, FL 33170	Project Partners Prudential Mortgage Capital Company (PMCC) Local Initiatives Support Corporation (LISC) Florida Housing Finance Corporation (FHFC) Miami-Dade County, Office of Economic and Community Development (OECD) U.S. Department of Housing and Community Development (HUD) The Preservation Challenge Cutler Manor is a 220-unit family housing development located south of downtown Miami in the Cutler Bay region. Built in 1970, the property had undergone some modest renovations throughout the years, but was in need of a more comprehensive renovation scope. POAH's Role With the seller parent-entity entering bankruptcy, Cutler Manor and its sister properties were at risk falling into disrepair and losing their affordability. Cutler Manor, an over-leveraged asset with significant deferred maintenance, required a purchaser who could execute a complex transaction preserving the Section 8 subsidy, restructuring the existing debt profile, and implementing a capital improvement plan. Only with these three components could the property sustain a healthy future dedicated to affordable, family-housing. An important attribute of a successful purchaser in the high-tax area of Miami is being a non-profit. By Florida state-statute, non-profit owner entities of affordable housing developments are entitled to full tax abatements; a critical boost to operating income for these properties. With very few strong non-profits operating in the State of Florida, part of POAH’s decision to pursue these acquisitions was a desire to help strengthen the non-profit presence in Florida. Stagnant bond markets and rising interest rates moved POAH from its original 501c3 bond execution to a conventional debt product with a shorter term and lower interest rate. Because of the tax abatement that follows non-profit ownership, POAH never sought to syndicate this deal, a circumstance that proved to be an unplanned blessing as the equity investor market also failed leaving many four-percent tax credit transactions unclosed in 2008. POAH’s $4M rehabilitation scope will serve to improve the individual units, the major building systems, and the curb appeal. The scope of work includes new roofs, a new playgrounds, improvements to the site and landscape, a new playground, and unit improvements. Additionally, POAH again has partnered with One Economy to bring wireless internet to this property. With a large number of children on this property, POAH will work with service providers to bring resources to the property.
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