Dealmaker: Merchants Capital Secures $77M for St. Paul Affordable Housing Project
(Soul Apartments, St. Paul, Minn.)
Merchants Capital, Minneapolis, provided more than $77 million in financing to develop Soul, an affordable, mixed-use development in Saint Paul, Minn.
Merchants Capital arranged debt financing for Soul totaling more than $77 million. It secured a $33 million Merchants Bank of Indiana construction loan, a $16.6 million MBI equity bridge loan and a $27.45 million Freddie Mac Tax-Exempt Loan. RBC Capital Markets served as equity provider for the project.
The property – owned and developed by Schafer Richardson – is situated on the West Side at the intersection of Robert Street and Plato Boulevard. 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.
Soul will provide 178 units of affordable housing to Saint Paul residents and families. 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 units, 23 three-bedroom and 12 four-bedroom apartments will be restricted at 30% area median income. The remaining 143 units comprise one-, two- and three-bedroom floorplans and will be restricted to individuals earning 60% AMI or lower. The 35 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.
Merchants Capital worked alongside Schafer Richardson, together with Greater Minnesota Housing Fund, AFL-CIO Housing Investment Trust, Freddie Mac, RBC Capital and Ramsey County. The City of Saint Paul also contributed to the project through allocation of American Rescue Plan Act funds and grants to support gap financing.
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 2024.