Chelsea Investment Corp. Closes Financing on Three Properties To Serve Low-Income Housing Needs

SAN DIEGO - Dec. 16, 2014 - PRLog -- Carlsbad-based Chelsea Investment Corp. (Chelsea) has closed escrow on three properties in San Diego and Imperial Counties that will provide low-income housing for several targeted populations.

Combined, the transactions will add nearly 260 units to Chelsea’s portfolio. The company has developed and financed more than 7,681 affordable-housing properties throughout California, Arizona and New Mexico since 1992.

“We are excited to be moving forward with these three projects,” said Jim Schmid, Chelsea founder and Chief Executive Officer. “Each one fits into our mission to provide housing solutions for people in search of a quality place to live at affordable rates. By working with civic leaders and community organizations, we are able to help residents meet their needs.”

The largest development is Westminster Manor, a 16-story high-rise apartment building at 1730 Third Ave., in San Diego. Chelsea represented itself in the transaction while the seller was represented by Victor Krebs of Colliers International. Purchase price was $28,650,000.

The 152 studio and one-bedroom units for low-income seniors built in 1972 will undergo a full interior and exterior renovation estimated at $12.5 million. The property was formerly owned and operated by Westminster Manor of San Diego, Inc., who has partnered with Chelsea to refinance and redevelop the building so that it will remain as affordable senior housing for another 55 years.

Building improvements will include new fire sprinklers and fire alarms, sound-insulated windows, roof and boilers, along with extensive repairs to the plumbing systems and balcony decks. Asbestos will be abated and an improved building security system installed.

During the renovation, the Chelsea/Westminster Manor of San Diego, Inc. partnership has arranged for residents to be temporarily relocated to accommodations including The Lafayette Hotel and the Residence Inn Gaslamp. The Chelsea/Westminster Manor of San Diego, Inc. partnership also contracted with Serving Seniors to provide a social service professional who, along with a property management representative, has been working with residents to prepare for and ease their transition to the temporary quarters.

The work will commence in December, with the relocation occurring in phases, beginning in early February. Completion is expected in September 2015.
Post-completion, the Chelsea/Westminster Manor of San Diego, Inc. partnership will work with Serving Seniors to manage services onsite as well as to encourage and inform residents to take full advantage of Serving Seniors’ West Wellness Center.

BASIS Architecture of San Rafael designed the renovation project, with Ivy Architecture as landscape architect and interiors by Artisan Design. Emmerson Construction, an affiliate of Chelsea, is the general contractor and ConAM, the property manager.

Financing for the $54 million project was provided through a combination of sources including Union Bank as construction and permanent lender, and The Richman Group as tax credit investor. The San Diego Housing Commission authorized the issuance of tax-exempt bonds and the San Diego City Council, sitting as the Housing Authority of the City of San Diego, approved the bonds.

In a separate transaction, a Chelsea affiliate purchased 3.12 acres at 470 Wall Road in the City of Imperial from C&G Farms, Inc., for $650,000. The buyers and sellers represented themselves. An existing structure on the property will be demolished to make way for Las Palmeras Apartments, a complex of 56 multifamily homes designed for farm labor households under a program sponsored by the U.S. Department of Agriculture (USDA). Estimated value of the completed project is $13.6 million.

The complex will feature 12 one-bedroom, 24 two-bedroom, and 20 three-bedroom units. Four residential buildings will be constructed along with a standalone community building. There will also be a laundry and maintenance room as well as a basketball half-court, two barbecue and picnic areas, and a tot lot.

Las Palmeras will be built to LEED Platinum level with a solar panel system designed to offset 90 percent of the energy load for the units, community room, and laundry room.

Pacific Southern Community Development Corp. (PSCDC) has been engaged to provide educational and wellness programs and services, such as computer classes, financial education workshops, English as a second language (ESL), and art classes. PSCDC will also provide an after-school program for school-age children residing at Las Palmeras. All services will be provided free of charge to residents.

Construction is set to begin this month with completion in September 2015. Hedenkamp Architecture and Planning of San Diego is the architect with Finish Tech, an affiliate of Chelsea, as general contractor. Financing sources include the City of Imperial, Raymond James as tax credit investor, USDA as permanent lender, and Rabobank as construction lender, with Chelsea deferring part of its fees.

The third property is a 2.86-acre site at 1070 Meadows Drive in Calexico that will be home to the 48-unit Villa Primavera Apartments. An affiliate of Chelsea, with Southern California Housing Collaborative as the managing general partner, represented itself in the $810,000 purchase.

Designed for large families, the project also includes 17 units designated for households with at least one developmentally disabled member. Upon completion, the project is estimated to be valued at $13.3 million.

Designed by Hedenkamp Architecture and Planning to meet LEED Gold standards, Villa Primavera will consist of five two-story garden-style buildings and a community building with 48 carports and 53 uncovered parking spaces. It will feature 12 one-bedroom, 20 two-bedroom, and 16 three-bedroom flats. Grading is set to start in early December, with construction anticipated to take about 10 months.

Financing sources include the City of Calexico with CDBG and HOME funds, City Real Estate Advisors as tax credit investor, Multifamily Housing Program through the California Department of Housing and Community Development, and Rabobank, with Chelsea deferring part of its fees.

Residents will have access to free programs on-site, including after-school tutoring, computer classes, arts and crafts and reading programs for children; as well as adult educational, health and wellness and skill-building classes. In addition, part-time staff will be onsite to provide assisted living services for those with special needs.

ABOUT CHELSEA INVESTMENT CORPORATION
Since 1992, Chelsea has developed 7,681 units of affordable housing at a cost in excess of $1.4 billion. The firm’s development portfolio includes urban infill, mixed-use, suburban inclusionary, acquisition rehab and rural developments. For more information, please visit www.chelseainvestco.com.