Image courtesy of the City of Detroit
Detroit Deputy Mayor Melia Howard and members of the City Council joined developer Charles Dickerson III today to celebrate the opening of “The Beauton,” a $7.3 million mixed-use affordable housing project that brings 29 new units to the North End neighborhood. The Beauton promises to strengthen the community by addressing housing shortages, boosting the local economy, and revitalizing the area with its vibrant, inclusive design.
The Beauton provides 29 new affordable apartments: 10 micro-studio units, 15 studio units, 2 one-bedroom units, and 2 two-bedroom units. Many of the units are well below market rate to make them affordable to more Detroiters living in the area. Units will have rents based on 50-120% of area median income (AMI), with over half of the units at or below 80%. Rents for the micro units will be as low as $700 per month. Under the agreement, affordability of the apartments is guaranteed for the next 12 years.
Mayor Duggan emphasized that the North End has seen a lot of new investment, which can increase rent pressures for existing residents.
“The Beauton will bring 29 more units of much-needed affordable housing to North End to help make sure residents of all income levels can live in a growing and thriving neighborhood,” Duggan said.
Council President Mary Sheffield is delighted to see the expansion of housing availability and affordability and what it will mean for the storied North End and those who want to live, work and play there.
“The Beauton Development not only creates new affordable housing units for residents and families, but it also showcases what is possible when developers of color are engaged and given an opportunity to participate in the revitalization of our neighborhoods,” Sheffield said.
“With the completion of the project, I look forward to the residual positive impact on the North End community that is sure to follow.”
The $7.3 million project, built from the ground up, was funded by various sources, including a $1.55 million loan from the Detroit Housing for the Future Fund (DHFF). The development also obtained $550,000 in preferred equity and a $100,000 pre-development matching grant for developers of color from DHFF. Capital Impact Partners contributed with a construction loan of $2.45 million, a bridge loan of $1.35 million, and a grant amounting to $93,000.
Additional assistance came in the form of a $1.497 million grant from the Michigan Economic Development Corporation and a $500,000 loan from Ebiara to CADS III Management to support both the project and the firm’s broader growth strategy. The Detroit Economic Growth Corporation granted a tax abatement of $743,000 for the project, which will be distributed over the next 15 years.
Charles Dickerson, whose company CADS III Management is developing the Beauton, highlighted that he is truly grateful for the support that was made available by all of the project’s partners.
“Making sure these apartments were affordable is important to us. Making sure the Beauton is attainable for all Detroiters is a critical part of the mission for this project.”
Damon Hodge, Senior Loan Officer for Capital Impact Partners, part of the Momentus Capital branded family of organizations, emphasized that Beauton has transformed three parcels that were once vacant, blighted, and aging into a beautiful building featuring a combination of affordable housing and market-rate units.
“We are proud to provide Charles Dickerson with financial support to help stabilize and revitalize the resurgent North End neighborhood. Charles graduated from our Equitable Development Initiative in 2020 and has expanded on his work serving Detroit, while also mentoring emerging local developers so that they too can do even more to help our communities.”
In cooperation with LISC and the city of Detroit, the project qualified for a DHFF Developers of Color Matching Grant, an investment designed to grow the pipeline of minority-led affordable housing and preservation projects in Detroit. It offers up to $100,000 in matching funds to cover a portion of a project’s predevelopment expenses and soft costs. The grants are made possible through a partnership with JPMorgan Chase.
Image courtesy of the City of Detroit
Rob Lockett, Executive Director of LISC Detroit, highlighted DHFF and LISC Detroit are excited to join Dickerson on this affordable housing project for Detroiters.
“Detroit is an important market for LISC, serving the local market since 1990. I’m proud to say that LISC has been a partner in the North End for almost 30 years and excited about our new partnership with Charles Dickerson and CADS III,” Lockett said.
“This development represents the true essence of partnership, where capital to support local developers of color intersects with the mission driven work of providing high quality affordable housing to Detroit residents. We value our local developer ecosystem and will continue to support developers like Charles as they create quality housing solutions for our residents here in Detroit”.
DHFF, a private investment fund aimed at directing capital to create new and preserving existing affordable housing in Detroit, is anchored by a $15 million commitment from JPMorgan Chase of the fund’s total $58 million raise and a $10 million guarantee from The Kresge Foundation. DHFF is managed by LISC Fund Management, LLC, a subsidiary of Local Initiatives Support Corporation.
LISC Detroit sources and originates loans for DHFF. DHFF is a part of the larger Affordable Housing Leverage Fund, which is an initiative with the City of Detroit’s Housing & Revitalization Department and the Michigan State Housing Development Authority (MSHDA). Including the Beauton, the DHFF has now funded 13 projects totaling 435 new or preserved affordable units in the city.
“Projects like The Beauton exemplify the power of partnership and the impact of the Detroit Housing for the Future Fund in creating affordable housing solutions that meet the needs of our residents,” said Julie Schneider, Director of the City’s Housing and Revitalization Department.
The project also benefitted from a loan from the Ebiara Fund, which is designed specifically to ensure that developers of color not only participate in Detroit’s rebuilding but also grow and scale emerging development firms that play a leadership role in that effort going forward.
Rod Hardamon, Managing Director of Ebiara, mentions that the Beauton is the first “from the ground up” project for Charles Dickerson and CADS III Management.
“Our goal at Ebiara is to make sure that historically underrepresented development firms, like CADS III Management, have a significant role in shaping Detroit long into the future,” Hardmon said.