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MassDevelopment In The News
Project Obtains Loan Boost
February 8, 2007: The Beacon, by Patricia Bertuccio
ACTON — The new owners of a massive affordable housing project in North Acton have received a $45 million loan to help build the development.
Avalon Bay Communities, based in Virginia, received a low-interest 30-year bond from the Massachusetts Development Finance Agency, the state's authority that works with businesses, financial institutions and municipalities to stimulate economic growth across the commonwealth. MassDevelopment does not supply funds, but serves as a middleman to link up borrowers with potential private investors.
The loan was closed on Dec. 21, 2006, and Avalon workers broke ground at the end of December, after it purchased the property previously known as Woodlands at Laurel Hill from Omni Properties.
The housing community, located along Westford Lane and Nagog Park Drive, will feature 380 apartment units and 64 condominiums and is now called Avalon Acton. Part of the development straddles the Acton-Westford border in North Acton. Twenty percent of the apartments and 10 percent of the condos will be priced as affordable.
Tony Fracasso, the senior vice-president of housing finance for MassDevelopment, said he believed the cost of Avalon Acton would be around $75 million. MassDevelopment's loan covers around 60 percent of construction expenses and since the bond is exempt from federal taxes, it provides incentives for lenders to charge a low interest rate.
"The profile of the project fit perfectly with what we think is important from a public purpose perspective," Fracasso said. "It's new construction of housing units and part of it is affordable. That's our mission to support housing projects like that."
The loan is meant for use of the rental units only and the lent money is proportional to the size of the project, according to MassDevelopment and Avalon officials. While anyone can rent the apartments, the condominiums, which are in the design phase, are age-restricted to occupants 55 and older.
Under the state Chapter 40B laws, each city and town is required to work toward making 10 percent of its housing within its borders affordable. Avalon Acton brings the town's percentage to around 6 percent. Communities below the 10 percent threshold can be subject to developers trumping local zoning regulations to construct affordable housing.
Scott Dale, the project manager from Avalon, said apartments should be ready for occupants this fall. Dale said Acton is part of a sub-market of Metrowest that is very attractive for buyers. He expects the project to total $68 million.
"There has been very little supply [of housing] in the area over the last 20 years," Dale said. "I think most communities understand and recognize the need for affordable housing."
Avalon Bay Communities has built 4,500 homes in 167 communities including Lexington, Bedford, Newton and Quincy and 50,000 apartments around the country.
Dale said the motive for a real estate company to build homes under Chapter 40B state laws is that it can add different types of homes in areas not zoned for these residences.
"I think the incentive for a developer is to address the lack of zoned land for multi-family houses," Dale said. "In the right location and done the right way, communities embrace multi-family homes and recognize the critical need for affordable housing."
The state has a formula to determine the price of the affordable units. Fracasso said affordable housing prices are based on the median income of a four-person family in the Boston metropolitan area. Families qualify for 40B homes and rates if they earn 50 percent of the median income of $40,050, according to Fracasso.
"There's been a lot of growth between Lexington and [Interstate] 495," Dale said. "Avalon is excited and happy to be a part of it."
© Copyright 2007 The Beacon.
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