Building America CDE Allocates $5 Million in New Markets Tax Credits for Paseo Verde Development in Philadelphia
$48 Million Project to Spur Economic Development, Affordable Housing, Job Creation
February 22, 2012
Building America CDE, Inc., a subsidiary of the AFL-CIO Housing Investment Trust (HIT), is allocating $5 million in New Markets Tax Credits (NMTC) for the construction of Paseo Verde, a $48 million, mixed-use development in a distressed area of Philadelphia. The transit-oriented low-income development will be a cornerstone of a public-private collaboration to revitalize the Ludlow community.
Building America CDE is working closely with the project’s co-developers. Jonathan Rose Companies specializes in producing “green” affordable housing in urban communities, while Asociación Puertorriqueños en Marcha (APM) is a local community developer seeking to reintegrate Ludlow with nearby Temple University and surrounding neighborhoods.
“We are very pleased to be participating in this project that is going to have such a beneficial impact on this historic but underserved community,” said Eric W. Price, CEO of Building America CDE and Executive Vice President of the HIT. “Besides offering quality affordable housing, Paseo Verde will also provide urgently-needed medical and social services as well as retail to local residents.”
The 1.9-acre development site has been vacant for decades and is adjacent to the Temple University Regional Rail train station. Paseo Verde will offer affordable housing, healthcare services, and retail activity to a community where the poverty rate is over 60% and unemployment exceeds 25%. It will consist of 120 units of affordable and workforce housing and 30,000 square feet of commercial and retail space. It will also bring a primary healthcare facility and other medical services to this medically underserved area, as well as a social services office.
“Paseo Verde will help rejuvenate the community,” said Price. “It will be located close to Temple University, which is a major employer in the city. The development will offer workers affordable housing, places to shop, as well as restaurants and other activities. This is the type of foundation that invigorates urban neighborhoods. We are proud to be a part of it.”
Price said the $5 million in tax credits is provided through a federal program established to help spur revitalization of low-income communities. Under the New Markets Tax Credits program, tax credit incentives are provided to investors for making equity investments in developments being constructed in distressed communities.
Many environmentally sensitive building techniques will be used in constructing Paseo Verde, which means “green way” in Spanish. The project is seeking gold certification under the LEED Neighborhood Development and LEED for Homes program.
Construction of Paseo Verde is expected to generate an estimated 150 jobs for members of Philadelphia’s building and construction trades unions. Furthermore, it is estimated that the project will also create 42 new permanent jobs and support the retention of another 39 jobs in the local economy, creating opportunities for the building’s residents to find nearby employment.
“It’s always good news for our members when construction projects like this get underway, especially in today’s economy,” said Patrick Gillespie, business manager for the Philadelphia Building and Construction Trades Council. “Now that we’ve had the official groundbreaking, a lot of our members are going to be on the job earning a family-supporting wage.”
Building America is following the long and successful history of its parent company, the HIT, in helping Philadelphia meet its redevelopment needs. In the past 15 years, the HIT has provided more than $55 million in financing for projects in that city, representing $82 million of development activity, 650 units of housing, and 500 union construction jobs.