Aeon, CDT partner on $36 million acquisition
By Cam Bonelli
Minneapolis-based Aeon in collaboration with Community Development Trust announced its $36 million purchase of Season Park Apartments, 951 E 77th St., in Richfield on Sept. 21.
Community Development Trust, a national investor in affordable housing based in New York, partnered with Aeon, a nonprofit developer, to close on the $40 million deal in less than a week. The companies plan to invest $4 million in repairs and rehabilitation of the complex. The city of Richfield Housing and Redevelopment Authority approved a loan of $150,000 to Aeon for the purchase Aug. 21.
The companies’ purchased the property in an effort to protect 422 units of affordable housing within Richfield’s growing housing market. The average cost of homes in Richfield increased by 6 percent over the past year with the price per square foot increasing from $200 to $220. Homebuyers and renters wanting access to the Twin Cities purchase or lease property in Richfield due to its affordability and proximity, raising the cost of housing within the community and pushing out low-income families.
Richfield Mayor Pat Elliott, City Councilmember Michael Howard, City Councilmember Maria Regan Gonzalez, Richfield Public Schools Superintendent Steven Unowsky, Aeon President and CEO Alan Arthur, CDT President and CEO Joseph Reilly, and Hennepin County Commissioner Debbie Goettel attended the press conference.
During the press conference, Arthur said that Aeon’s goal is to provide affordable housing.
“Aeon had less than a week to put together this deal,” Arthur said. “We needed an equity partner, and CDT stepped up.”
Arthur said had CDT not stepped up, hundreds of families would have been displaced.
“This collaboration will be a template for the private and public sector moving forward,” Arthur said.
Tingerthal said since 2000, the number of families using more than 30 percent of their income for housing increased significantly.
“More than 530,000 households pay more than 30 percent of their income on housing,” Tingerthal said. “That number has been steadily increasing over the past 15 years. The cost of rent has gone up by 11 percent while income, if you factor in inflation, has decreased by 4 percent.”
Unowsky said that the sale of the Seasons Park Apartments to Aeon and CDT is a tremendous achievement.
“Along with Gov. Dayton, Lt. Gov. Smith and Richfield city leaders, we feared the sale of this property to another potential buyer would have forced the displacement of virtually all the current residents, including approximately 250 students who attend our schools,” Unowsky said. “Their departure would have been devastating to the Richfield Public Schools system.”
Blake Hopkins, vice president of Housing Development at Aeon, said this purchase demonstrates the collaboration of government, private, public and nonprofit sectors to preserve affordable housing within a community. Hopkins said Aeon plans to begin renovation on the garden units first and address the grading issues.
“First and foremost, we are going to rehab and rehabilitate units that experienced water infiltration and renovate common areas,” Hopkins said.
Currently, Richfield houses three low-income apartment complexes that have 191 units available for rent, and most of the apartments available offer income-based housing, according to Affordable Housing Online. Richfield also has 150 U.S. Department of Housing and Urban Development apartments or project-based Section 8 housing and 11 other apartment complexes with no rent-assistance programs, which are considered affordable for low-income families.
Fifty-percent of renters in Richfield are considered “overburdened,” meaning they pay at least 30 percent of their income on rent, with an average rate of $854. Families who earn less than $2,847 total and pay the median rent would be considered overburdened. Richfield’s HUD income limits for one person is $19,000 annually and for a family of four $27,000.
With the preservation of 422 units by Aeon and CDT’s acquisition, Richfield’s Season Park Apartments will remain on the list of affordable, safe housing.
Follow Cam Bonelli Twitter @RISunCurrent.