Project Partner Spotlight: Crescent City Community Land Trust
By Green Coast on 15 Mar 2016
Crescent City Community Land Trust’s (CCCLT) Executive Director Julius E. Kimbrough, Jr. says that there were many aspects of the Pythian building renovation that attracted his organization to want to become a partner in the project along with ERG Enterprises and Green Coast. Creating affordable workforce housing, producing low-market rate commercial spaces, and restoring to commerce an incredibly culturally rich historic building were high on the list.
What was critically important to CCCLT, however, was Green Coast’s willingness to work with a variety of partners, and unlike some developers, the company’s commitment to affordability.
“Green Coast was one the first developers that recognized the value and relevance of the community land trust (CLT) model in this market,” Kimbrough says. “With skyrocketing costs for housing and commercial spaces, community land trusts can safeguard that housing remains affordable and that there are lower market rates for nonprofits and community organizations.”
Community land trusts are nonprofit organizations that provide public investment in a variety of projects – residential, commercial and community purposes – ensuring the development of lasting community assets and permanently affordable housing.
Here’s a brief overview of the CCCLT operating model.
- Philanthropic organizations including Greater New Orleans Foundation and the Kellogg Foundation fund CCCLT.
- After paying operating costs, CCCLT dedicates monies to the creation of permanently affordable developments.
- All CLTs have the capacity to subsidize real estate development costs by purchasing or carrying the cost of the land to be developed, thus eliminating that cost of developments and making them more affordable to developers and end-users.
- Some CLTs are full owners or equity partners in some of their projects. Instead of owning the land under the Pythian, CCCLT is an equity partner in the development and accepts a lower return on investment than other partners in order to pay for affordable elements (residential or commercial) within the Pythian project. This Central Server CLT model is in use nationally and will be utilized again by CCCLT in metropolitan New Orleans.
- CCCLT also has a Futures Fund investment tool that can provide acquisition and pre-development loans and other types of financing.
In the case of the Pythian, CCCLT is an owner and with the agreed-upon lower return, this will pay for the permanent affordability of 25 of the project’s 69 otherwise market-rate apartments. The work-force apartments, one bedroom and two bedrooms, will be leased to people who earn between 60 and 120 percent of the area median income, which translates to between $30,000 and $70,000 annually.
“These 25 units are definitely for workforce renters,” says Kimbrough. “Blue collar and paraprofessionals who need affordability in order to live near their work.”
The Pythian project is considered a mixed-use project that combines retail, office, medical office, and housing – both workforce and market rate. That means in addition to the workforce housing, CCCLT has leased one fifth of the available commercial space. Kimbrough says that this will allow them to lease these spaces to nonprofits and community-oriented organizations.
Kimbrough, who is mild mannered, admits that the project gets his adrenaline flowing.
“Yes, I’m excited,” says Kimbrough. “The Pythian is our major investment at this time, and it’s our premier permanently affordable investment in New Orleans.”
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