Bedrock and partners make deal to keep 236 Midtown homes affordable

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Bedrock and partners make deal to keep 236 Midtown homes affordable

Detroiters looking to stay rooted in market-driven Midtown just found 236 affordable options. The City of Detroit has announced that income-eligible tenants of the 18-story, 236-unit Cathedral Tower apartments can remain in their homes, due to a joint venture between MRK Partners and local developer Fortus Partners, who plan to preserve the building as affordable for another 30 years.  The deal, in partnership with Bedrock, will lower the affordability rate from 80 percent of the area median income to 60 percent or below for all units.

Resident retention efforts are as important as attraction initiatives, according to Detroit’s Director of Housing and Revitalization Arthur Jemison.

“For equitable growth to happen in Detroit, we need to retain the residents who have stayed while attracting new neighbors. Preserving affordable housing in buildings like Cathedral Tower is a large part of that equation,” says Arthur Jemison, director of Housing and Revitalization for the city.

With the building put on the market earlier this year, Cathedral Tower was in danger of being converted to market-rate units, which would have reportedly displaced residents who’ve lived there for years. 
Bedrock, according to a new affordable housing agreement approved by City Council, will provide $2.15 million of $12 million needed to support renovation of the building, including a new rooftop HVAC system, new windows, upgraded fire alarm system, kitchen and bath improvements, new plumbing and interior and exterior upgrades. Bedrock plans to develop or rehabilitate up to 3,500 residential rental units on its own and with partners, committing that 20 percent of the units, or an estimated 700, will be affordable housing.
 “We are thrilled to be part of making this important project possible,” says Dan Mullen, Bedrock president. “Our first two new residential developments downtown have been mixed income developments, and we plan to keep creating new affordable housing options. With this project, we are also taking the critical step of helping preserve existing affordable housing, ensuring that we don’t take one step forward and two steps back by losing the existing affordable housing and long-time residents we have today.” 
The Cathedral units are among a reported 2000 existing affordable housing units throughout greater downtown at risk of expiring within the next five years. Under the new agreement, the units will extend their affordability for 30 more years.
 “Affordable developments should not be an afterthought of growth but rather an integral part of the change,” says Jordan Friedman of Fortus Partners. “Fortus is proud to work alongside MRK, Bedrock, and the city to achieve that goal.”
Adds Sydne Garchik, of MRK Partners: “Affordable is not just a unit with lower than market rent. Affordable space is an opportunity to empower existing residents by providing essential building amenities and features.”    
The deal is expected to be financed through a combination of federal Low Income Housing Tax Credits, tax-exempt bonds, and low-interest financing through Bedrock Real Estate Services.
Built in 1972, Cathedral Tower  has been an important affordable housing property for decades, but residents faced losing their affordable rates in 2020 when the use agreement requiring the lower rents was to expire. The building, enduring a foreclosure in the early 2000s and multiple owners since then, has also fallen behind on improvements to apartments and building upgrades.
 MRK-Fortus will seek additional funding support from the Michigan State Housing Development Authority. Construction is projected to begin in early 2019 and is expected to be complete by early 2020. 

 

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