When long-time CDFI partner HOPE (Hope Enterprise Corporation and Hope Credit Union) approached us for help with a loan solution to revitalize and transform the historic Lamar Life Insurance building, it was an easy “yes.”
This iconic landmark building, right across from the Governor’s Mansion in downtown Jackson, MS, was built in 1924. Though its location and history would make it a prime spot for residential and commercial use, the building had fallen into disrepair. That’s when HOPE stepped in.
HOPE’s first attempt to get a financing group together didn’t pan out. For their second attempt, they approached us. Together, we tailored a $1.75 million loan solution, part of a 50% participation in a loan from the CDFI partner on this project, HOPE, to provide a $3.5 million loan to the owner/developer, The Mattiace Development Company, a major force behind the redevelopment of Jackson. The new Lamar Life building will comprise 23 apartment homes, with 6 affordable homes at 80% AMI ($40,500), as well as 49,017 square feet of commercial/office space. LTV is 78% of appraised value of leasehold interest.
“Working with NC really helped finally pull this project together. We’re a relatively small lender for a large project like the Lamar Life building so we needed outside funding. It was a larger loan than we could handle alone,” said Phil Eide, Senior Vice President for Community and Economic Development for HOPE.
This is our fifth participation loan with HOPE, a high-impact CDFI operating in Mississippi, Louisiana, Alabama, and Tennessee. The building is scheduled to open at the end of this year.
“NC isn’t afraid of unique projects like this. They know underwriting. They’re a good partner who understands the mission, project, and outcome. Their staff is experienced and easy to work with, and they always seem to say ‘yes.’ They rely on our experience and trust us, too. It’s a real partnership,” Eide said.
“The projects we fund depend on our borrowers’ project needs. We work with them to customize financing to their project,” said Emily Dorfman, our Senior Loan Officer.
The rehab of Lamar Life is expected to spur additional downtown development because of the prominent location and its historic architecture. This renovation will assist local government and business community initiatives to stabilize and revitalize downtown Jackson.
Our financing for Lamar Life is part of a combined New Markets Tax Credit and Historic Tax Credit financing structure. The project utilized a lease-pass through structure, which is typical in a project using both NMTC and HTC equity. The commercial component and New Markets loan structure are newer products for us; Lamar Life is our second New Markets loan. The project team includes a very experienced developer, general contractor, and finance team which includes NMTC and Historic tax credit industry veterans US Bank and Brownfield Revitalization, LLC.
HOPE is a community development financial institution, community development intermediary and policy institute that provides affordable financial services; leverages private, public and philanthropic resources; and engages in policy analysis in order to fulfill its mission of strengthening communities, building assets, and improving lives in economically distressed parts of the mid-South. HOPE’s NMTC Program finances community facilities and businesses that support economic development, job creation, and the expansion of essential community services such as quality health care, education, and other services to underserved communities. Since its launch, HOPE has invested $75 million in NMTC financing to 97 businesses, community facilities and nonprofit organizations in the country’s most impoverished region.