The Community Development Trust, Rocky Mountain Communities announce $25 million joint venture to preserve Denver’s Garden Court Apartments as affordable housing through 2033
Mayor Hancock hails new partnership as an ‘economic catalyst’ that provides long-term rent stability for low- to middle-income tenants at 300-unit complex in one of nation’s fastest-growing markets
New York, N.Y. — Dec. 11, 2018 — The Community Development Trust (“CDT”), which provides long-term debt and equity capital for the creation and preservation of affordable housing, today announced a new $25 million joint venture with Rocky Mountain Communities (“RMC”) to recapitalize the 300-unit Garden Court Apartments in northeast Denver near Aurora.
The CDT-RMC partnership will extend affordable rent policies at Garden Court – one of Denver’s largest housing developments, serving low- and middle-income wage earners across 15 three- and four-story buildings – through 2033 as part of a new 15-year regulatory agreement with the Colorado Housing and Finance Authority (CHFA).
Denver Mayor Michael B. Hancock touted the CDT-RMC investment and alliance with CHFA as an “economic catalyst” that aligns with the strategic aims outlined in the city’s Housing and Inclusive Denver five-year housing plan, which recommends implementing a suite of policies and actions from 2018 through 2023 to promote more affordable housing options.
“On behalf of the people of Denver, I want to thank the Community Development Trust, Rocky Mountain Communities and CHFA for helping to ensure that these affordable homes remain affordable for the people who proudly call Garden Court their home,” Mayor Hancock said.
“Affordable housing remains a primary challenge to our residents’ achieving the level of equity they should expect and deserve, and we’ve made great progress delivering on housing Denver families can afford. But we must do more,” Hancock said. “The commitment of CDT, RMC and CHFA to the preservation of diverse housing options that are accessible and affordable to all Denver residents exemplifies the type of unified effort we all hope to replicate moving forward in the Mile High City.”
As the city’s housing analysis noted, the Denver market “lacks rental units that are affordable and available to low-income households. Cost burdens are widespread, affecting 36 percent of Denver residents, and renters at a rate more than twice as high as owners. Across all income levels, these higher costs are disproportionately affecting extremely and very low-income households.”
Built in 1972, Garden Court Apartments was purchased out of foreclosure by RMC from the U.S. Department of Housing and Urban Development (“HUD”) in 1996. The property’s current rent-affordability protections were set to expire in December 2023. Garden Court is a mixed-income community with 75 units at market rate and 225 units serving moderate-, low- and very low-income residents who have few housing options of comparable quality and virtually none in terms of affordability in the rapidly gentrifying Denver area.
Garden Court is within one of the nation’s fastest-growing markets for development and near job centers such as the University of Colorado Anschutz Medical Campus, the Fitzsimons Innovation Community of bioscience companies, Children’s Hospital and a new Veterans Affairs Hospital. Developers recently broke ground on an $87 million, 253-apartment project with market-rate rents. The site also is close to public transportation, the four major interstates connecting the Denver metro area (I-225, I-270, I-25, I-70) and the 14-mile, multiuse Sand Creek Greenway. Several grocery stores and retail shopping options are less than 1 mile from the property, and the surrounding 6-mile radius includes several schools, including elementary through university-level institutions.
RMC’s partnership with CDT not only ensures rents will remain stable moving forward, but it will also fund $3.6 million in planned apartment and property improvements, including upgrades and repairs to plumbing, mechanicals, kitchens and bathrooms. Another highlight is that CDT and RMC have earmarked $50,000 to turn an old swimming pool that was no longer in use into a new soccer field for children, satisfying requests from many Garden Court families.
“The CDT-RMC joint venture provides peace of mind for Garden Court residents who want to live, work and raise families here with the comfort of knowing that they will be able to afford to stay in the community,” said RMC President and CEO Richard Taft.
CDT, based in New York City, is a rare combination of both a federally certified community development financial institution (CDFI) and a real estate investment trust, more commonly known as a REIT. While CDT does make loans, as a REIT it can also take partial ownership stakes in properties in exchange for cash that can be used for renovations to preserve properties and maintain their status as affordable.
The investment with CDT allows RMC to continue managing and maintaining the Garden Court complex, as well as to continue providing on-site services such as day care for preschool children, before- and after-school student activities and a community gardening program for senior citizens. The Garden Court investment is CDT’s second in Colorado, after CDT’s partnership in 2016 with Volunteers of America and the Colorado Springs Housing Authority to recapitalize Summit Apartments, a 256-unit mixed income property in Colorado Springs. RMC operates only within the state of Colorado, with the majority of its holdings in the Denver area.
“CDT’s investment with RMC – our first in Denver – is part of our larger commitment to ensuring long-term access to quality, safe and affordable housing throughout the country,” said Brian Dowling, Chief Investment Officer at CDT.
“We share RMC’s vision that hardworking families in Colorado should have the opportunity to feel connected to a community and enjoy a sense of pride in place,” Dowling said. “Our joint venture with RMC serves as a model of how a national mission-driven institutional investor can partner with a large nonprofit organization to help address the nation’s critical shortage of affordable housing.”
The Community Development Trust (“CDT”) is a national lender and investor in affordable communities. Working with local, regional, and national partners, CDT makes long-term equity investments and originates and acquires long-term mortgages. In its sixteen years, CDT has invested over $1.2 billion in debt and equity capital to properties in 44 states and regions — helping to preserve and create nearly 47,000 units of affordable housing. CDT is a private real estate investment trust (REIT), a certified Community Development Financial Institution (CDFI), an approved Fannie Mae affordable housing lender, and a member of the Federal Home Loan Bank of New York (FHLBNY).
About Rocky Mountain Communities
Rocky Mountain Communities (“RMC”) builds brighter futures by investing in resident-focused affordable housing and services, empowering individuals and families to thrive. Currently, RMC owns 1,132 affordable housing units for underserved populations statewide and manages an additional 500 units. Since its founding in 1992, RMC has responded to the need for housing and program services for more than 10,000 families.