Marianas Variety

Last updateThu, 19 Oct 2017 12am

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    Wednesday, October 18, 2017-6:34:18A.M.

     

     

     

     

     

Ironwood breaks ground on Middle Road for affordable housing

THE seventh property in the Marianas region by the largest developer of affordable housing on Guam made history yesterday as the first major investment in the Northern Marianas to pique the interest of Goldman Sachs.

At the groundbreaking ceremony on the five-acre property across from Docomo Pacific headquarters and Pizza Hut yesterday, Northern Marianas Housing Corp. corporate director Jesse Palacios hailed it as a historic occasion as “the CNMI is fortunate to have Ironwood Saipan collaborate with R4 Capital in luring a well-respected, prestigious financial and investment company like Goldman Sachs to venture way out here to the Western Pacific.”

U.S. Congressman Gregorio Kilili Camacho Sablan, Lt. Gov. Jude U. Hofschneider. NMHC Corporate Director Jesse Palacios, Saipan Mayor Marian Tudela, and DPW Secretary Martin C. Sablan join Iron Bridge Capital Partners LLC partner John Hand and other Ironwood officials for the ground breaking ceremony on Middle Road yesterday.

Palacios was upbeat about other Low Income Housing Tax Credit Investors following the trail blazed by Goldman Sachs and considering investment opportunities in the Northern Marianas.

Variety learned that it was syndicator R4 Capital that recommended to Goldman Sachs that it look into investing in the CNMI.

On its website, R4 Capital stated that it is “a proven team of affordable housing leaders whose collective history includes origination, underwriting and management of more than $12 billion in LIHTC investments for more than 100 corporate investors.”

It has provided “competitively structured capital for developers in over 2,000 transactions for over 25 years.”

Palacios said Sandy Beach Homes, the first LIHTC project in the CNMI, has set the bar quite high, but he is confident that Ironwood will experience the same level of success in attracting qualified and eligible tenants to lease the 80 units in the housing project.

Hand, co-partner with Rick Inman at Iron Bridge Capital—the most successful housing developer on Guam and the CNMI, flew from Atlanta, Georgia to participate in the groundbreaking ceremony.

Ironwood Bridge Capital is Ironwood’s parent company.

“We are excited to finally break ground on Ironwood’s newest Saipan location. Saipan is one the most beautiful places on earth. We feel lucky to have an opportunity to build an exciting new project there,” he said.

He said the new project will provide much needed, new and affordable housing to CNMI residents.

He said Ironwood takes pride in building communities “where families can flourish.”

He said they have five projects on Guam and all have been successful.

He was referring to the fully leased Ironwood Estates, Ironwood Manor, Ironwood Glen, Ironwood Heights, and Ironwood Heights II.

Iron Bridge Capital Partners LLC partner John Hand.

He also said that Ironwood Saipan is the first LIHTC project in the CNMI funded entirely by private investors and private lenders.

Hand also said it is estimated the project will provide $2.5 million in tax revenues for the CNMI.

He also touted that it would generate 100 full-time jobs during construction.

It will also create a demand for local businesses.

“We are very pleased with the design and comfort of the units,” he said.

Ironwood Property Management LLC vice president for development and construction Sean K. Easter acknowledged the support of government agencies “who have been instrumental” in helping them get through the permitting process.

Both Hand and Easter also recognized their construction partners.

Present at yesterday’s ceremony were U.S. Congressman Gregorio Kilili Camacho Sablan, Lt. Gov. Jude U. Hofschneider, Saipan Mayor Marian Tudela, DPW Secretary Martin C. Sablan, and Marianas Visitors Authority managing director Perry Tenorio, among others.

Lt. Gov. Hofschneider acknowledged the confidence of the investors in the CNMI.

10,500 renters on Saipan

NMHC’s Palacios raised a significant statistic yesterday.

“Did you know that 72.9 percent or 10,500 of Saipan’s households are renters?” he asked.

He said this is a good renter base for Ironwood Saipan to work with.

“With the hotel projects on the horizon, both local and foreign hotel employees who fit this income category will be in need of housing,” said Palacios.

He went on to talk about eligibility for the program and the income limits.

He said the LIHTC program follows the federal housing agency’s income guidelines to determine eligibility: for a family of four the total household income must be at or below $36,660.

Palacios said for a single wage earner in the household, he or she must be earning over $17 an hour.

“I think you will agree with me that this income threshold is not so low for Pacific Islands standards,” he said.

For Palacios, this means that there are many families or individuals eligible to call Ironwood Saipan and other tax credit properties “home.”

From Blue Water Homes to Ironwood

Both Easter and Hand explained for Variety the transition from Blue Water Homes LLC to Ironwood Saipan LLC.

After Sandy Beach Homes, Blue Water Homes LLC. was the second developer awarded LIHTC credits.

In 2011, Blue Water Homes LLC was approved by the NMHC board to receive $4.85 million in tax credits per year for 10 years under the LIHTC program.

Easter said, “Triple J asked us to come in and take over the project.”

Ironwood is Sandy Beach Homes LLC co-developer.

“We helped co-developed Sandy Beach with them,” he said.

From left, Iron Bridge Capital Partners LLC partner John Hand, Ironwood Property Management LLC vice president for development and construction Sean K. Easter and NMHC Corporate Director Jesse Palacios.  Photos by Alexie Villegas Zotomayor

Hand said they were approached by Blue Water Homes LLC and they have extensive experience developing these affordable communities on Guam.

They negotiated, but he declined to disclose further details.

In a release, Ironwood said it has taken over the development of the Blue Water project from Triple J Enterprises, Setiadi Architects designed the new community and Maeda Pacific will be the primary contractor.

“Ironwood will finance the project using Low Income Housing Tax Credits granted by the Northern Marianas Housing Corporation. This will be the first project on Saipan supported by Low Income Housing Tax Credits with an outside investor,” the release said.

Further, equity financing is being provided by R4 Capital with a construction loan from Citi.

Hand said they will be trying new construction techniques on Sapan that they have not used before.

The project is estimated to be completed by November 2015.

An earlier statement by Easter revealed that unique to this gated community is its energy-efficient construction including solar power, solar hot water heaters, insulated walls and ceilings, low-emissivity windows, and Energy Star light fixtures and appliances that will result in up to 70 percent in utility savings for residents.

Ironwood Saipan will also have filtered water, a 3,000 sq. ft. community center, playground, covered pavilions with BBQ grills and a basketball court.

Ironwood Bridge Capital is Ironwood’s parent company.

Ironwood, the only LIHTC property manager on Guam, has raised and invested $125 million in new equity and $15 million of new debt on Guam to finance the low-income housing projects.

It is the first and only developer in the region to have successfully utilized the Section 42 Low Income Housing Tax Credit Program.

The LIHTC program is an indirect federal subsidy used to finance the development of affordable housing for low-income families.

The program was created in 1986 through the Tax Reform Act of 1986 by the U.S. Congress.