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Investing in the Future of Northgate Apartments

Posted November 17, 2011

VHFA, the New Northgate Housing, LLC, and the U.S. Department of Housing & Urban Development (HUD) came together yesterday to sign the legal documents firming up a new and improved financing structure for the Burlington apartment complex.

The new loan provided by VHFA for $13.265 million is the largest in the Agency’s history. The new loan is being used to pay off existing debt and to finance $5.2 million in improvements, including new roofs and boilers, weatherization, and some kitchen and bathroom upgrades. The weatherization and new boilers are expected to reduce the cost of heating for residents.

These apartments overlooking Lake Champlain in Burlington’s New North End are unique in several ways. Northgate is owned by New Northgate Housing LLC, which is comprised of the Northgate Residents Ownership Corporation, a resident-controlled organization. Northgate is also the largest single subsidized apartment development in the state, with 336 units of housing, and is perpetually affordable, by virtue of a Vermont Housing & Conservation Board Housing Subsidy Covenant.

Northgate is truly a mixed-income, diverse, multi-generational community. With incomes of 30% through 95% of area median income, Northgate’s 1,000 residents are from Vermont and 14 countries, Its longest standing resident moved in 40 years ago, and residents range in age from 1 to 95. A full time on-site youth services coordinator offers popular, successful programs.

Northgate’s financial restructuring involved many legal and financial complexities. A nearly $6 million HUD loan came due and a restructuring proposal needed to be reviewed and approved by HUD. In addition, a capital needs assessment outlined a scope of work that required more resources than the project’s existing reserves. Further complexities involved transferring the ownership of the ground lease, combining two HUD projects into one from an operating and financing basis, and completing a market study required for HUD’s approval of a new rent structure to service the new debt (while maintaining affordability). Finally, the financing needed to be structured in a way that complied with requirements of the U.S. Treasury’s New Issue Bond Program in order to obtain low 4.5% fixed rate financing.

The vision of several key players 18 months ago, including Phil Holmes in HUD’s Manchester office who died in a tragic accident in July, and the tenacity since then of VHFA, Maloney Properties Inc. (Northgate’s management agent), and Northgate Residents Ownership Corporation, and their development and legal consultants led to yesterday’s monumental accomplishments.

Thanks to these individuals and organizations, Northgate will be preserved as a mixed income community, with needed improvements and sufficient reserves to cover future capital needs.

 

 



Vermont Faces Up to Energy Challenges

Posted October 3, 2011

Two apprentice weatherization technicians with Fresh Energy squeezed orange insulating foam into cracks between boards and spaces around wires in the attic of unit 421 at Northgate Apartments in Burlington on Wednesday. The foam forms a barrier that prevents warm air from leaking from the lower-level living space.

Air sealing is one of three steps the owners of the 336-unit affordable housing complex have undertaken this year to enhance energy efficiency and shrink heating bills for residents.

By winter, families in 60 units will have beefed up insulation in their attics and basements, air-tight rooms and new high efficiency boilers. These changes are expected to save residents at least 25 percent on their heating bills, said Kathleen Tyrrell Luce, vice president of Maloney Properties Inc., which manages the apartment complex.

“We intend to set Vermont on a path to attain 90 percent of its energy from renewable sources by mid-century.” Currently, only 23 percent of the energy Vermonters use for electricity, for heat and for transportation comes from renewable sources.

The broad strategies to achieve the goal would include:

  • - Enhanced efficiency.
  • - Greater use of clean, renewable energy sources for electricity, heating and transportation.
  • - Electric vehicle adoption.
  • - Use of natural gas and biofuel blends where nonrenewable fuels remain necessary.

Public Comments:

Vermonters have opportunities in the coming weeks to comment on this challenge to give up fossil fuels and the strategies proposed to achieve it. Several hearings have already been held and two more are scheduled next week. The Department of Public Service also will accept comments by email, mail and online through Oct. 10.

Full Burlington Free Press Article or Click Here for PDF of Article