The week of July 16, LP Solutions transferred its equity stake in the Close Building to Just-A-Start (JAS), a local nonprofit, allowing it to expand its property share in the Cambridge affordable housing market.
With this transfer, affordable housing will continue to grow at the Close Building, a former chocolate confectionary factory. LP Solutions is a division of the national Low Income Housing Investment Group—one of the nation’s largest owners of affordable housing. Just-A-Start of Cambridge is a community development corporation with a mission, in part, to provide local affordable housing.
LP Solutions transferred its 91 percent equity ownership stake, valued at $14 million dollars, in the Close Building to JAS the week of July 16. This development contains 61 units and is 100 percent HUD project-based Section 8 housing, commonly referred to as the Housing Choice Voucher Program. Tenants participating in HCV programs make a monthly contribution equal to 30 percent of their yearly adjusted income.
JAS was founded in 1968 as a multi service non-profit corporation. It expanded in 1970 into affordable housing and evolved into one of the city’s most prominent community development corporations. It owns a variety of affordable housing buildings, each with a different set of project requirements based on funding sources and tenant rental subsidiaries.
Deborah Rule, executive director of JAS, acknowledged that the nonprofit has a large presence in the Cambridge affordable housing market.
“We own 600 units, around 18 to 20 buildings, and all are affordable,” Rule said. “We also work with a wide range of federal programs and tenant subsidiaries.”
Rule said that JAS has grown into a prominent local affordable housing organization.
“We currently own one of the three Fresh Pond Towers. This 20-story complex is all affordable housing. We will utilize low-income tax credits,” Ruhle said. “We will look for an investor that can contribute funds for rehabbing this complex in the next couple of years.”
Based on the 2016 Cambridge Community Development Department’s housing profile, JAS owns approximately 8 percent of the 7,700 units of affordable housing in the city of Cambridge.
Rule acknowledged that LPS donated its ownership in the Close Building to JAS.
“We own the Close Building mortgage-free, and this allows us to restructure the property debt,” Rule added. “It helps us to raise funds for improvements to make it a better place for people to live in the community.”
Rule explained that JAS was a managing partner and a co-owner in the Close Building. JAS had a partnership with LPS for 11 years. The two organizations managed the complex together for over a decade. LPS transferred its ownership to JAS last month, the largest corporate donation JAS has ever received.
Rule pointed out that the Close Building on Broadway was turned into affordable housing 40 years ago. This building has a variety of mixed-use housing and includes studios and one to two bedroom units.
“We are working on creating a rehab plan to upgrade the Close Building to modern building codes.” Rule said. “The building renovation upgrade will begin next year and will make the Close Building a quality and modern complex for all of Cambridge.”
The donation of the Close Building to JAS ends a very difficult phase in the life of the Close Building and its 61 tenants: the renewal process for the continuation of federal Section 8 housing.
This property ownership transfer ends any speculation that the HUD contract will not be renewed. It also gives the new owner, JAS, the opportunity to raise funds to support new renovations and modernization. This transaction helps to maintain affordable housing, which the Cambridge Housing Profile referenced is only 7,700 or 14 percent of the total housing units, or 52,800 in the very tight Cambridge housing market.