An affordable housing project is taking root in Newark after the developers secured $42 million in construction financing.
The team of L+M Development Partners, Type A Projects and MSquared closed on the financing package earlier this week, Real Estate NJ reported. Construction at 250 Georgia King Village is expected to begin within a few weeks.
The project is set to bring 78 affordable housing units near Newark’s University Hospital. About 20 percent of the units will be reserved for homeless individuals and families. The housing complex will also receive 30 rental vouchers from the city’s housing authority.
The project is part of a state program connecting residential operators with health care, according to Real Estate NJ. Other features of the complex will include a clinic on the ground floor and office space operated by the nearby hospital.
Newark Mayor Ras Baraka celebrated the financing in prepared comments, noting the city’s need for good affordable housing and health care.
“This $42 million partnership will enable us to address both these needs simultaneously through collaboration and with compassion,” Baraka said.
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The capital stock for the project includes a $22 million mortgage from the New Jersey Housing and Mortgage Finance Agency and $6 million from the Hospital Partnership Subsidy Program. Additional capital sources include $18 million in tax credit equity from Wells Fargo and $3 million from University Hospital.
Earlier this year, Newark’s tallest development landed a $90 million construction financing package to begin work on Phase 1 of The Halo Newark. While the three-building, 949-unit project from Acier Holdings isn’t exclusively about affordable housing, the plans for the first phase of the project include 30 affordable units.
L+M recently had a leadership change for the first time in almost four decades. Ron Moelis, who co-founded the affordable housing developer in 1984, ceded the chief executive role to Lisa Gomez. Moelis continued on as chairman.
MSquared is a firm run by former New York City deputy mayor Alicia Glen, which launched in 2020. Last year, the firm raised $108 million from Citigroup, Goldman Sachs and Wells Fargo, among others, fundraising for new middle-income housing.
Type A Projects has worked with L+M in the past, including on the Bronx Point project. Glen has also known Moelis for years.
[Real Estate NJ] — Holden Walter-Warner