SAINT PAUL, Minn. – Leading multifamily financing provider Merchants Capital today announces it has provided more than $77 million in financing for the development of Soul, an affordable, mixed-use development in Saint Paul, Minnesota. The property – owned and developed by the key partner on the project, Schafer Richardson – is a crucial redevelopment project for the city and an important factor in its commitment to expanding and improving access to affordable housing within Saint Paul city limits.
Situated on the West Side at the intersection of Robert Street and Plato Boulevard, Soul will provide 178 units of affordable housing to Saint Paul residents and families. The mixed-use complex will be constructed on a redevelopment site of a current city infill location, with all construction completed as 100% union labor and union construction. An environmental cleanup of the area will be associated with the redevelopment. The property was designed, and will be built, to earn an Enterprise Green Communities Certification, and will meet all necessary standards to comply with the City of St. Paul’s sustainable building policy. Additionally, the development will feature a rooftop solar array to support lower electricity rates.
Upon completion of construction, Soul will feature one-, two-, three- and four-bedroom units, a unique feature designed to meet the needs of both local individuals and families. Of the total 178 units, 23 three-bedroom and 12 four-bedroom apartments will be restricted at 30% area median income (AMI), providing a deeply affordable option for families. The remaining 143 units comprise one-, two- and three-bedroom floorplans and will be restricted to individuals earning 60% AMI or lower. The 35 deeply affordable units will remain affordable at 30% AMI for 30 years, and all units within the property will remain at 60% or lower for 40 years.
A proven leader in the multifamily lending space, Merchants Capital arranged the debt financing for Soul totaling more than $77 million. The firm secured a $33 million Merchants Bank of Indiana (MBI) construction loan, a $16.6 million MBI equity bridge loan and a $27.45 million Freddie Mac Tax-Exempt Loan (TEL) to comprise the total $77 million. RBC Capital Markets served as the equity provider for the project.
“Supporting our local residents, families and communities by crafting innovative financing solutions for these much-needed affordable housing properties is what we do best,” said Marsha Goff, Executive Vice President at Merchants Capital’s Saint Paul Office. “Our mission is to work hand-in-hand with local developers and cities to increase access to high-quality, affordable housing, and the development of Soul is a beautiful depiction of that mission in action. We are grateful for the opportunity to showcase our commitment to the residents of Saint Paul and are determined to continue to make an impact in this neighborhood and nationwide.”
Merchants Capital was proud to work alongside Schafer Richardson, together with Greater Minnesota Housing Fund, AFL-CIO Housing Investment Trust (HIT), Freddie Mac, RBC Capital and Ramsey County. The City of Saint Paul also contributed greatly to the project through allocation of American Rescue Plan Act (ARPA) funds and grants to support gap financing.
“Soul is Schafer Richardson’s third development with Merchants Capital, and we value their expertise and creativity in getting complicated real estate transactions done,” said Katie Anthony, Vice President of Development at Schafer Richardson. “Soul will add critical affordable housing units and positively activate an important corner of the West Side neighborhood in St. Paul and Merchants partnership is an essential element in that transformation.”
The design firm serving as the project architect is Kaas Wilson Architects, and Weis Builders is serving as the project’s general contractor. Construction is currently underway, with an anticipated completion date in Q2 of 2024.