A public housing complex on Birch Street in Kansas City, Kansas, is about to get the top-to-bottom overhaul it has needed for decades.
Hunt Capital Partners announced on Oct. 1 that financing has closed on Chalet Manor Apartments, a $21.3 million rehabilitation at 1601 Birch St. The developers are Fulson Housing Group and Select Development, working with the Kansas City Kansas Housing Authority. According to Hunt Capital's announcement, the townhome-style buildings went up in 1971 and were last renovated in 1988.
"We are excited to close and start construction on Chalet Manor Apartments," said Matt Fulson, president of Fulson Housing Group.
What's getting fixed
Hunt Capital's release doesn't name a general contractor, but the contractor shows up in public bid records. This summer, Rau Construction Company posted a notice to bid as the firm taking subcontractor bids for the Chalet Manor renovation.
That notice lays out the scope in plain terms. It describes renovating 16 apartment buildings plus remodeling two community buildings. Exterior work includes windows, siding, roofing, doors, concrete, steel and asphalt paving. Interior work covers drywall repairs, cabinetry, flooring, doors and hardware, miscellaneous specialties, painting, mechanical, electrical and plumbing.
The notice also spelled out the job's rules: certified Section 3 firms were strongly encouraged to bid, crews need OSHA 10-hour training, and bids had to include Building Construction prevailing wage. Sub bids were due Aug. 10.
When the work is done, Chalet Manor will have 64 income-restricted homes, and they're bigger than most apartments. Hunt Capital lists two two-bedroom, one-bath units; 54 three-bedroom, one-bath units; four four-bedroom units with 1.5 baths; and four five-bedroom, two-bath units. Community amenities include a clubhouse, on-site management, picnic areas, a playground, recreation areas and service coordination.
How the money works
All 64 homes are converting through HUD's Rental Assistance Demonstration program, known as RAD, which moves the property onto a 20-year Project-Based Voucher Section 8 contract. Every unit will serve households earning up to 60% of area median income.
The financing stack, as Hunt Capital describes it:
- Tax credits: $9.7 million in federal Low-Income Housing Tax Credits and another $9.7 million in state tax credits, syndicated by Hunt Capital Partners.
- Construction loan: $13.5 million in tax-exempt construction financing from UMB Bank.
- Housing authority loan: a $2.5 million construction-to-permanent loan from KCKHA.
- Permanent loan: $4.9 million from Cedar Rapids Bank & Trust.
"Following its renovation, Chalet Manor will continue to provide quality affordable housing to 64 of Kansas City's families in need," said Jeff Weiss, president of Hunt Capital Partners.
Andrea Tapia, executive director and CEO of the housing authority, called the closing "an exciting new chapter" and credited KCKHA staff, residents, board leadership, consultants, lenders and lawyers for getting what she called a "complex transaction" done.
"Being involved in the closing process was a continuous demonstration of what can be accomplished when public, private and community partners come together around a shared vision," said Brady Ridnour, a vice president in UMB Bank's Impact Finance Group.
Kansas's state housing tax credit is a big part of why deals like this pencil out. Here, the state credits match the federal credits dollar for dollar, for $19.4 million in credits on a $21.3 million project.
The players behind the deal know this kind of work. Fulson Housing Group describes itself as a vertically integrated firm that develops, builds and manages low-income housing, from rural new construction to big-city rehabs. Select Development is a boutique firm focused on affordable housing finance. The housing authority, which has served Kansas City and Wyandotte County for more than 60 years, administers over $66 million a year in HUD housing assistance and capital funds.
Why it matters for Contractors
RAD rehabs like Chalet Manor are steady work for contractors who know affordable housing renovation: roofing, siding and window crews, concrete and paving subs, and interior trades for kitchens, flooring, drywall, paint and full MEP updates across 16 buildings. The prevailing wage, OSHA 10 and Section 3 requirements on this job are typical of public housing work, so firms that already have those boxes checked have an edge. Rau Construction is running this one, and with housing authorities across the region looking at RAD conversions to fix aging stock, getting to know Rau, Fulson and Select Development could pay off on the next one too.