DETROIT, (July 17, 2023). Read the official press release from the City of Detroit.
Detroit developer Charles Dickerson III breaks ground on a new construction project creating 29 brand new apartments that will be guaranteed at affordable rates for the next 12 years
More than half of new apartments at or below 80 percent AMI (Area Median Income)
Project made possible thanks to the Detroit Housing for the Future Fund (DHFF)
Detroit Mayor Mike Duggan, Detroit developer Charles Dickerson III, officials, funders and community members today celebrated the groundbreaking of a new multi-family affordable housing development in Detroit’s North End. “The Beauton,” a $7.3 million mixed use building will bring another 29 units of brand-new affordable housing to Detroit.
The Beauton will provide 29 new affordable apartments: 10 micro-studio units, 15 studio units, 2 one-bedroom units, and 2 two-bedroom units. Many of the units are well below market rate to make them affordable to Detroiters living in the area. Units will have rents based on 50-120% of area median income (AMI), with over half of the units at or below 80%. Rents for the micro units will be as low as $700 per month. Under the agreement, affordability of the apartments is guaranteed for the next 12 years.
“North End has been seeing a lot of new investment and that can bring with it rent pressures for existing residents,” said Mayor Duggan. “The Beauton will bring 29 more units of much needed affordable housing to North End to help make sure residents of all income levels are able to live in a growing and thriving neighborhood.”
Council President Mary Sheffield is excited to see the expansion of housing availability and affordability and what it will mean for the storied North End and those who want to live, work and play there. “The Beauton Development not only creates new affordable housing units for residents and families, but it also showcases what is possible when developers of color are engaged and given an opportunity to participate in the revitalization of our neighborhoods,” she said. “I look forward to the completion of the project and the residual positive impact to the North End community that is sure to follow. "
Funding from DHFF, Capital Impact Partners, Ebiara Fund, and MEDC
The $7.3 million ground-up project was made possible by funding from several sources, including a $1.55M loan from the Detroit Housing for the Future Fund (DHFF). The development also received $550K in preferred equity, and $100K developer of color pre-development matching grant from DHFF. Capital Impact Partners provided a construction loan of $2.45M, a bridge loan of $1.35M, and a grant of $93K. Additional support includes a $1.497M grant from Michigan Economic Development Corporation and a $500K loan from Ebiara to CADS III Management to support the project and the firm’s overall growth strategy. The Detroit Economic Growth Corporation awarded a $743K tax abatement for the project spread out over the next 15 years.
“I am truly grateful for the support that was made available by all of our partners on this project” said Charles Dickerson, whose company CADS III Management is developing the Beauton. “Making sure these apartments were affordable is important to us. Making sure the Beauton is attainable for all Detroiters is a critical part of the mission for this project.”
In cooperation with LISC and the city of Detroit, the project qualified for a DHFF Developers of Color Matching Grant, an investment designed to grow the pipeline of minority-led affordable housing and preservation projects in Detroit. It offers up to $100,000 in matching funds to cover a portion of a project’s predevelopment expenses and soft costs. The grants are made possible through a partnership with JPMorgan Chase.
“DHFF and LISC Detroit are excited for another housing option for Detroiters,” said Camille Walker Banks, executive director of LISC Detroit. “Thanks to our amazing partners, we also are proud to provide a Developer of Color Grant to Charles Dickerson’s firm. The key is continuation of affordability – DHFF is designed to encourage funding support of new and mixed-income units within the financial means of city residents. We are actively seeking support for the next phases of the initiative which will further leverage additional developments throughout communities in the city.”
DHFF, a private investment fund aimed at directing capital to creating new and preserving existing affordable housing in Detroit, is anchored by a $15 million commitment from JPMorgan Chase of the fund’s total $58 million raise and a $10 million guarantee from The Kresge Foundation. DHFF is managed by LISC Fund Management, LLC, a subsidiary of Local Initiatives Support Corporation. LISC Detroit sources and originates loans for DHFF. DHFF is a part of the larger Affordable Housing Leverage Fund, which is an initiative with the City of Detroit’s Housing & Revitalization Department and the Michigan State Housing Development Authority (MSHDA). Including the Beauton, the DHFF has now funded 13 projects totaling 435 new or preserved affordable units in the city.
"The Beauton is the latest example of how the DHFF is a powerful tool to preserve and create neighborhood-based, affordable, and mixed-income housing," said Julie Schneider, director of the City's Housing and Revitalization Department.
The project also benefitted from a loan from the Ebiara Fund, which is designed specifically to ensure that developers of color not only participate in Detroit’s rebuilding but grow and scale emerging development firms that play a leadership role in that effort going forward.
“The Beauton is the first “from the ground up” project for Charles Dickerson and CADS III Management” said Rod Hardamon, Managing Director of Ebiara . “Our goal at Ebiara is to make sure that developers like Charles have a significant role in shaping Detroit long into the future.”
Construction on the Beauton is expected to take about a year, with new tenants being able to move in in summer of 2024.
To learn more about the Detroit Housing for the Future Fund click here.