City and County of San Francisco, L+M Development Partners and Bayview Hunters Point Multipurpose Senior Services Close on Financing for Candlestick Heights

Candlestick Heights The Registry real estate San Francisco

196-unit rental property, after 1st-phase turnaround by Holliday Development, to provide critical affordable housing to the Bay Area

San Francisco, CA – December 26, 2012 – The City and County of San Francisco, L+M Development Partners (L+M),  and Bayview Hunters Point Multipurpose Senior Services (BHPMSS), today announced that financing is in place for the acquisition and development of Candlestick Heights, an 11-building, 196-unit affordable rental community. With the support of the San Francisco Mayor’s Office of Housing, this transformation brings together L+M, a leader and innovator in developing affordable, mixed-income and market-rate housing, and BHPMSS, a 42-year-old community based nonprofit committed to improving the quality of life in the Bayview Hunter’s Point district. The development, which is New York-based L+M’s first venture in California, is at 833-881 Jamestown Avenue just to the west of San Francisco’s Candlestick Park.

The property was purchased from Jamestown Equity Partners LLC, the managing member of which is Oakland, CA-based Holliday Development. Holliday, which focuses on urban infill housing and mixed-use development, played a crucial role after being brought into the deal by Citi Community Capital (Citi) to stabilize the property as the recession eroded the original financing and development plan. Holliday’s role in the rescue and repositioning of Candlestick Heights builds on the firm’s established association with the Bayview community, where its 5800 Third Street condo-over-retail property is now sold out.

Candlestick Heights will help answer the demand for affordable housing in the City, providing one-, two-, three- and four-bedroom homes reserved for households earning less than 60% of the Area Median Income (AMI) for San Francisco.  For residents in the neighborhood, Candlestick Heights represents the fulfillment of a long awaited promise to improve conditions and create an opportunity for people to live in well-maintained and managed rental housing. Once complete, the development will feature 350,000 square feet of floor space, 280,000 square feet of which will be residential. Subject to California’s Tax Credit Allocating Committee (“TCAC”) regulations, the Project will meet Title 24 requirements for energy efficiency and will contain multiple sustainable elements.  Residents will have access to landscaped gardens and play areas in the courtyards between the buildings, as well as ample garage parking. In addition, BHPMSS will administer an afterschool program on-site, which will be adapted to meet residents’ demand for such services.

“The development of Candlestick Heights is a great opportunity for us to expand affordable living options in San Francisco, where reasonably-priced homes for working families are hard to come by,” said Ron Moelis, CEO of L+M Development Partners. “We’re looking forward to broadening L+M’s work to California and hope that Candlestick Heights will be our first of many successful, collaborative projects with local partners in the area.”

Prior to acquisition, the existing property consisted of 66 complete, unsold apartments. These apartments will begin leasing effective today with occupancy expected for Spring 2013. Construction on the remainder of the project is expected to commence immediately and last approximately 16 months; the general contractor is Cannon Constructors, Inc., an established construction entity with San Francisco, Los Angeles and Orange County offices. C&C Affordable Management LLC (C&C), the management affiliate of L+M, will be the property manager for Candlestick Heights and will also market the project’s apartments in collaboration with BHPMSS.

“We are particularly proud of the partnerships that have been influential in making this project a reality,” added Jonathan Cortell, Vice President of L+M Development Partners. “We thank our partners, public and private, for their work enabling us to develop high-quality affordable homes in the Bayview community.”

Citi and Wells Fargo collaborated on making the financing available to support the development of Candlestick Heights. Demonstrating its commitment to the City and the Bayview community, Citi, long invested in the project site, purchased $69.4 million in tax exempt bonds issued by the City and County of San Francisco that will fund acquisition costs and complete the project’s construction.  Wells Fargo also contributed substantial equity proceeds in exchange for low income housing credits “as of right” to the project with the bonds.

“Bayview Hunters Point Multipurpose Senior Services is thrilled to be a part of bringing workforce housing to people who live and work in the neighborhood.  This project has been a long time in the making and we know the future residents will make a positive contribution to the community,” said Cathy Davis, Ex. Dir, BHPMSS.

“We’re pleased to see Candlestick Heights enter this new chapter, and it’s particularly exciting that L+M, original lender Citibank, BHPMMS and the City of San Francisco were able to structure a transaction without any City funds,” said Rick Holliday of Holliday Development.  “This is truly a win-win proposition, transforming a property nearly scuttled in the recession but reborn to provide housing to everyday San Franciscans.”

“Citi is pleased to have worked with the San Francisco Mayor’s Office of Housing to achieve a solution for the former Jamestown Condominiums site,” said Steven Hall, Managing Director of Citi Community Capital. “We are confident that this project will provide high quality, affordable housing for working class families of San Francisco for many years to come.”

“We’re honored to participate in the Candlestick Heights transaction. The project is a great success story of a public-private partnership revitalizing a stalled property, and transforming it into needed affordable housing. We thank and congratulate the deal team,” said Korbin Heiss, Wells Fargo Community Lending & Investing.

The development of Candlestick Heights continues L+M’s commitment to provide high-quality affordable housing in the communities that need it most. As the firm expands its reach from the New York tri-state area and Gulf region to the West Coast, L+M continually strives to improve the neighborhoods in which it works.

About Holliday Development
Since 1988, Holliday Development has created innovative housing and commercial space for thousands of residents, entrepreneurs, artists and businesses in Northern California. Whether working with investor/clients or for its own account, Holliday Development has a highly regarded track record of success in building vibrant mixed-use communities that are sustainable and cutting edge. Holliday Development has taken some of the region’s most complex real estate and brought it to life, from pioneering the loft-housing concept in San Francisco’s South of Market (SOMA) district 25 years ago to recent award-winning developments such as Blue Star Corner in Emeryville, Pacific Cannery Lofts/Central Station in Oakland and 5800 Third in San Francisco. For more information, visit www.hollidaydevelopment.com.

About L+M Development Partners
Since 1984, L+M Development Partners has been an innovator in developing quality affordable, mixed-income and market rate housing, while improving the neighborhoods in which it works.  A full-service firm, L+M works from conception to completion, handling development, construction and management with creativity that leads the industry.  L+M is responsible for more than $2 billion in development and construction and has created more than 10,000 high-quality units in the tri-state area alone. The firm is also expanding its geographic footprint to the Gulf region and West coast.  Community leaders, government officials and investment organizations turn to L+M because of its consistent track record of excellence. Additional information can be found at www.lmdevpartners.com.

West Coast Commercial Real Estate News