Resident Profile: Market Rate

Use Restrictions / Subsidy: None, Market Rate

Financing: Fannie Mae DUS Originated by Oak Grove Capital

Limited Partner(s): Equity Resource Investments & Private Investors

Joint Venture Partner(s): Wishrock Investment Group, LLC.

This community includes 396 one-, two- and three-bedroom apartments and represents RMDG’s first foray into market rate housing. The property was purchased from the REIT Home Properties using non-recourse Fannie Mae debt featuring a 3.88% rate amortized over 30 years with a balloon in year 10. Along with a value-add component involving interior upgrades on unit turns in exchange for rent increases, the development plan was to improve and maintain the asset’s physical and operational components for a re-sale in year 5.  Please contact RMDG to learn more about the acquisition of Falcon Crest Apartments.

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Resident Profile: Family Designation

Use Restrictions / Subsidy: 180 Section 42 Units @ 60% AMI

Financing: HUD 221d4 Loan Originated by CW Capital

Limited Partner(s): Boston Financial

Joint Venture Partner(s): Wishrock Investment Group, LLC.

This community includes 180 two-, three-, and four-bedroom apartments and serves individuals and families earning less than 60% of the local area median income. The property was purchased from Lehman Brothers using non-recourse HUD insured debt featuring a 2.70% rate amortized and fixed over 40 years. The development plan included a $7MM renovation ($38.8K per-unit), and upon stabilization, to continually improve and maintain the asset’s physical, operational and resident services components over a long-term hold.  Please contact RMDG to learn more about the acquisition of Harbinson Gardens Apartments.

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Resident Profile: Family Designation

Use Restrictions / Subsidy: ELIPHRA Project, 100% Project-Based Section 8

Financing: HUD 223f Loan Originated by Bank of Montana

Limited Partner(s): None (100% In-House)

Joint Venture Partner(s): Wishrock Investment Group, LLC.

This community for families includes 96 one- and two-bedroom apartments serving households earning 20% – 60% of the area median income (AMI). The property was purchased using non-recourse HUD insured debt featuring a 2.82% rate amortized and fixed over 30 years. The development plan was to improve and maintain the asset’s physical, operational and resident service components over a long-term hold. Please contact RMDG to learn more about the acquisition of Vista Villa Apartments.

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Low-income complex unveils changes

Written by Ed Kemp, American Staff Writer

Hattiesburg mayor Johnny DuPree cuts the ribbon on Wednesday afternoon during the dedication ceremony for the Overlook Apartments on Campbell Drive in Hattiesburg. The 120 apartments were remodeled for the residents. / Bryant Hawkins-Hattiesburg American

 Overlook Apartments has a new playground, new ENERGY STAR windows and appliances and new formaldehyde-free insulation.

“Everything is so much prettier,” said longtime resident Montee Smith, who has lived in the apartment complex on Campbell Drive for 28 years.

Representatives of Rocky Mountain Development Group and The Wishcamper Companies, which owns the property, unveiled the renovations to the low-income apartment complex during a ribbon-cutting Wednesday.

The complex consists of 120 apartments units that benefit from Section 8 rental assistance, meaning that tenants pay up to 30 percent of their gross income toward the market-value rent, and the difference is paid by the federal government.

Funding the $12.2 million renovation was a $5.7 million Housing and Development-insured loan; a $500,000 Affordable Housing Program loan from the Federal Home Loan Bank of Dallas; and $6 million of equity financing from Enterprise Community Investments.

Mississippi Home Corp provided $750,000 in low income housing tax credits.

Rocky Mountain Development Group and The Wishcamper Companies invests in subsidized housing across the country. They have about 1,600 units in Mississippi including Hattiesburg, Vicksburg and Jackson.

Joe Wishcamper, chief executive officer of the Wishcamper Companies Inc., said that renovating an existing complex costs half the price of building one.

“In many ways we deliver a superior product because we’re dealing with a stabilized community,” he said, citing existing tenants. “It’s a win-win for everybody.”

The renovations, which began in August 2011 to repair a run-down complex beset by leaks, mold and mildew, were a partnership between the private and public sectors.

In addition to the renovations, the complex also has a computer center and employs a resident manager.

“Dependable safe housing for people – it changes lives,” said Mayor Johnny DuPree. “This is what we’re about here in Hattiesburg – doing things for people when they can’t do it for themselves.”

The complex, which offers 2- to 4-bedroom apartments, has 24 units that serve tenants earning 50 percent of the area median income or less and 96 units that serve tenants earning 60 percent of the area median income or less.

According to HUD statistics, the area median income for a family of four is $50,187.

For Smith, 89, who is wheelchair-bound, the housing allows her to live by herself.

“I wouldn’t want the aggravation of living with someone else. It’s just a blessing to a lot of people who are old and don’t have the money.”

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Resident Profile: Family Designation

Use Restrictions: Section 42 - 100% @ 60%

Financing: Fannie DUS Loan Originated by CW Capital

Limited Partner(s): Equity Resource Investments (ERI)

Joint Venture Partner(s): Wishrock, LLC.

This community for families includes 430 one-, two- and three-bedroom apartments serving households earning less than 60% of the area median income (AMI). The property was purchased from its general partner and SunAmerica using non-recourse Fannie DUS debt featuring a 4.17% rate amortized over 30 years with a balloon in year 10. The development plan was to improve and maintain the asset’s physical, operational and resident service components for 8 years, with a targeted refinance or re-syndication in year 9-10. Please contact RMDG to learn more about the acquisition of Oak & Pine Ridge Apartments.

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Each partner involved in rehabilitation of the MI College Apartment Complex in north Holly Springs had words of praise for the project and developers – the Wishcamper Companies & Rocky Mountain Development Group.

The physical rehabilitation of the apartment complex was celebrated at a ribbon-cutting ceremony Friday, Nov. 18, and the complex was renamed Spring Gardens Apartments.

The physical rehabilitation is the first step and the next step will be the transformation of the community, said Rick Wishcamper, president of Rocky Mountain Development Group. Wishcamper Companies and Rocky Mountain Development Group jointly own the property. The companies are privately owned.

“It is an amazing project – the culmination of a lot of work with many partners to make this happen,” Wishcamper said. “We are now the proud owner of this project.”

Before the apartments were rebuilt and the sewer lines replaced, 60 of the 100 units were boarded up, the sewer was backed up, and hazardous material used in the construction had to be removed.

“Quite simply, it was a very difficult place to live and the people who lived here suffered,” he said.

The property underwent a $6 million transformation, he said. Transformation of the community is the next step and will include a mentoring program for children ages 12 and 13, community gardens, and other programs to improve the lives of those who live in the apartments. The apartments have nice, safe playground equipment for children, a community center, and on-site security and oversight.

All units are currently occupied in the renovated complex, said Jason Spellings with Wishcamper Companies in Jackson. And there is a waiting list.

Mayor Andre’ DeBerry was pleased to see a dream come true and the fact that the apartments were rehabilitated a month earlier than deadline. He revealed how the project was dreamed forward locally.

“I was campaigning for my third term as mayor and walked through the complex,” he said. “I wept in the car when I left here on my way back home. I felt this should not be. How could we allow people in 2009 to live in deplorable conditions?”

By Chance, Rick Wishcamper and Jason Spellings were at Rust College discussing other projects and the mayor offered them a tour of the apartments – a drive-through, Spellings said.

“A few weeks later, the process began,” the mayor said. “This project moved with lightning speed. The Mississippi Development Authority and Housing and Urban Development and Wishcamper went to work. This is more than a physical project; this is intervention.”

Managers with Patton and Taylor Construction praised the City of Holly Springs for helping move the project along – the public works director, Holly Springs Utility Department, the fire chief and police chief.

Maury McPhillips with the Mississippi Development Authority, said the project was unusual in how partners collaborated. He introduced four residents who have lived in the apartments since they were built in 1972 – Clemmie McFadden, Patricia Hannah, Joyce Crain and Larry Boxley.

Hannah said she raised two children in the apartment complex – experienced hard times and bad times.

“But it’s been good,” she said. “I’m still here. In the beginning it was really nice and now it’s nice again.”

Crain, who started out in Apartment #1, said the apartments were beautiful when first built.

“It feels real good. I love the showers,” she said. “God couldn’t have done any better.”

Wishcamper recognized “Clencie Cotton with Rust College for planting the seed with the mayor” and the college and Bryan Shumway, “who got us up here.”

Shumway is vice president of Wishcamper Companies.

In explaining the partnership, Spellings said the Mississippi Development Authority provided a long-term, interest-free loan to the developer and that the city is the fiduciary agent. The property manager, Tesco Properties of Memphis, was already managing the property as a favor to the United States Department of Housing and Urban Development and will remain as property.

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Rocky Mountain Development Group founding partners Rick Wishcamper and Justin Metcalf introduced themselves to the city of Missoula when they purchased the Wilma Building in a high-profile deal in 2007.

The pair started their company in Missoula and initially focused on traditional development, creating condominiums and buildings. In between other projects, RMDG worked to rehab portions of the Wilma and slowly sold sections – mostly condos on the upper floors – to an association of owners. A project this summer restored, replaced or replicated portions of the downtown landmark’s intricate outside cornice.

But that was the group’s last bit of work on the Wilma. In fact, the Wilma may be the group’s final traditional development project. Wishcamper and Metcalf announced at the end of September they’re putting the Wilma Theatre up for sale. If it’s sold, the only remaining piece of the building belonging to RMDG will be its offices on the Caras Park level.

Wishcamper and Metcalf, along with vice president Mike Bouchee, have shifted RMDG’s focus exclusively to acquiring and rehabilitating affordable housing communities. In the past two years, the group has bought more than 2,300 units of affordable housing across the country. The company also bought property in Hellgate Canyon on the site of the old Missoula Athletic Club, where one of its new projects is under way.

It was a change precipitated in part by recession and in part because the returns are high and the inventory is readily available. But it’s based, too, the trio says, on a broader desire to create a better quality of life for those who depend on affordable housing. RMDG aims to build up community assets that serve and reward everyone, from investors to tenants.

“In a lot of communities, affordable housing is a pejorative label for bad neighborhoods,” RMDG president Wishcamper said. “Affordable housing done right doesn’t recreate the history that led to the stereotype and prejudice. It’s creating communities that serve all stakeholders.”

If that sounds like a sort of good-development evangelism, it is.

Take the 100-unit Mississippi Industrial College Homes Apartments complex in rural Holly Springs, Miss.

Holly Springs Mayor Andre De’Berry said the rat- and roach-infested complex had a 30 percent occupancy rate when Rocky Mountain Development Group bought it more than a year ago. A portion of one building had burned, leaving a gaping hole in the roof. Tenants were unemployed, single mothers struggling to get by.

“People literally were living in homes where the window casings were leaving the structure itself. You can imagine trying to heat something like that. Or even to cool it,” De’Berry said.

Wishcamper, who is in charge of the Holly Springs project and travels there monthly as the project progresses, said the kids living there were embarrassed to call it home.

When the economy turned on its head, RMDG was fortunate to have been holding only a small number of properties, Wishcamper said. What it did have was an expanding expertise in navigating the complicated world of low-income housing tax credits and U.S. Department of Housing and Urban Development regulations. The company also had strong ties to national brokers. Wishcamper’s father, in fact, is a longtime developer, and has offered his advice and an occasional partnership with his own firm, Wishcamper Companies Inc.

Furthering the push into the specialized sector was the fact that there is a large surplus of affordable housing complexes in need of renovation. As interest rates dropped and buyers left the market, RMDG found it could buy existing complexes inexpensively, creating the chance to produce both big returns and better housing.

“I think that for all of us there was a period where operating the Wilma was really sexy, new, fast-paced. But to keep the doors open we had to get into real estate,” Wishcamper said.

*****

Rocky Mountain Development designed two primary lines of affordable housing business strategies: Metcalf specializes in straight acquisitions, the purchase of complexes that still have useful life and require less investment up front. Those deals are mainly financed by private investors and government-backed loans.

Wishcamper and Bouchee work on tax-credit acquisitions, which often rely on one-time funding streams such as stimulus program money and tax credits. These projects often involve dilapidated complexes like the one in Holly Springs.

RMDG purchased the foreclosed Holly Springs property from the Mississippi Development Authority for $1 – “We overpaid,” Metcalf said – after the city decided it wanted to work with RMDG to renovate the complex. A $5.4 million U.S. Department of Housing and Urban Development Neighborhood Stabilization Project grant was awarded to the project and RMDG added about another $1 million.

Work is now about 80 percent complete. The roofs are pitched, security guards walk the premises and several playgrounds have been installed. They’ve renamed the complex Garden Springs Apartments.

Not only did Rocky Mountain boost the self-esteem of tenants, business are starting to spring up in the area, De’Berry said.

De’Berry had toured a similar revitalization at another RMDG project site in Jackson, Miss.

“When I went there and saw this gated community with picnic areas, computer labs and a place for health centers, I was just blown away, and I saw that these guys were more than just business people. They were concerned about the people who live there,” De’Berry said.

RMDG has developed an entire resident services division to help tenants in all its complexes. Resident services are a key to success for both the project and those who live there, Wishcamper said. At the Industrial College Homes Apartments, resident services include the most basic of services, including helping tenants learn how to open a checking account.

Today, there’s a waiting list to get into Garden Springs.

“Three hundred to 400 people were literally standing in line to come get into the 100-unit apartment complex. It was astonishing to see, and (these were) people who wouldn’t even pass by or drive by (before the renovation),” De’Berry said.

******

RMDG’s local project will introduce Missoula to a new kind of affordable housing complex, based on the philosophy of community building ongoing in Holly Springs. The Silvertip Apartments complex under construction on East Broadway was funded by a unique deal RMDG helped structure.

“I spent my childhood down here playing basketball, working out, playing tennis,” said Bouchee, who is overseeing the Silvertip project. “We would put these, as a property, we would put them up against any property in Missoula in terms of amenities, quality and location. And they’re going to be extremely affordable.”

Low-income qualifying residents will move in, but so will middle-income and moderate-income residents. Students will qualify, too.

“It’s industry best practice to try to combine folks from across a broad income spectrum and age mix,” Bouchee said. “The more mix in a community, the more dynamic community you create and ultimately, the more healthy community you create.”

But structuring a deal to fund the large project and accommodate that range of qualifying residents was extremely complex.

RMDG began working on a deal in 2009, and bought the former athletic club property in 2010.

They had the vision and the qualifying property, but only a government entity could apply for HUD Neighborhood Stabilization Program grant money.

Nancy Harte, who works in the Missoula Office of Planning and Grants, worked with RMDG and the Missoula Housing Authority to write the grant application, which morphed into a 3-inch binder that ultimately asked for $5 million to build the 115-unit complex.

The HUD program is a one-time grant source that came out of a Bush administration program enacted when the housing market began to crumble. When Harte saw it come available, most of the nonprofit developers she usually works with weren’t in a position to work on a project that big.

“Rocky Mountain Development Group was at the table and said, ‘let’s explore this,’ ” Harte said.

The $5 million grant was the largest chunk of neighborhood stabilization money awarded in Montana and the only grant for a multifamily housing project. They also secured a $6.75 million loan from HUD’s Multifamily Housing Program. Missoula Housing Authority also provided $1 million to the project from funds secured by the sale of other affordable housing units.

Missoula Housing Authority will manage the property for RMDG and own 20 units, while RMDG will own the remaining 95 units.

*****

The private-public partnership was a first for Harte and for the Missoula Housing Authority, which usually works with nonprofit housing developers.

Missoula Housing Authority executive director Lori Davidson sees affordable housing projects becoming more dependent on public-private partnerships as the availability of federal grant money shrinks and the need for affordable housing grows.

“(Obtaining) grants to just build affordable housing is not enough to fill the affordable housing gap,” Davidson said. “Any sort of creative way to get funding, we need every one of them. We need to be thinking outside the box.”

The complicated Silvertip deal will be hard to duplicate, Wishcamper said.

But there’s always room for creativity and RMDG is on course to continue its rapid acquisition and renovation schedule. The group acquired $84 million of affordable housing in 2010 and wants to boost that number to $150 million through the first quarter of 2012.

That means Rocky Mountain Development Group will be busier than ever. Missoula Housing Authority already is forming an interest list for the Silvertip Apartments. Construction is ahead of schedule and RMDG hopes to have tenants in the complex by early next summer, Bouchee said.

Wishcamper is also set to fly to Holly Springs in mid-November for the ribbon cutting on the Garden Springs Apartments.

Sustainable development was always a part of RMDG’s mission, Metcalf said, but developing projects that better their communities has proved extremely fulfulling.

In Holly Springs at least, Mayor De’Berry says RMDG’s work has raised standards throughout the community, thus raising expectations of what tenants can do for themselves.

A Garden Springs tenant stopped to talk to De’Berry recently.

“They said to me, ‘Mayor, you told us you were all going to do something, You and the Wishcamper guys followed through on what you said,’ ” De’Berry said. “In Rick, I see a sense of community and sense of humanism that you don’t usually see in businessmen. I’m here to tell you, (RMDG) lives up to their mission.”

http://missoulian.com/news/local/article_3609590c-f7ae-11e0-a42d-001cc4c03286.html#ixzz1b3Ny9h9K

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