BOSTON– WinnCompanies announced that it has acquired Carl Mackley Houses, built in the Great Depression as the nation’s first federally funded housing complex, and has started a $23.7 million project to completely renovate the historic 184-unit affordable housing community in northeast Philadelphia.
The rehabilitation effort will modernize apartment kitchens and bathrooms in four residential buildings; install central air conditioning in all units; replace all windows and roofs; upgrade common areas; and renovate 19 apartments to make them fully accessible for persons with mobility impairments, while adapting eight units for use by people with sensory impairments.
“Carl Mackley Houses was born from a collective effort by labor unions and government to create desperately needed housing for working people. Eighty-six years later, the need for quality affordable housing is just as great, if not greater,” said WinnDevelopment President and Managing Partner Larry Curtis. “We’re proud to have the opportunity to lead a modern public-private partnership that is restoring and improving this historic housing community and guaranteeing it remains affordable for the next 40 years.”
The housing complex first opened in 1935 as single-family apartments for union workers. Sponsored by the American Federation of Full-Fashioned Hosiery Workers, it was the first housing project financed by the Housing Division of the Public Works Administration, a federal agency that later became the Works Progress Administration (WPA), a centerpiece of President Franklin Roosevelt’s New Deal programs.
“The City of Philadelphia and the Philadelphia Housing Development Corporation (PHDC), in conjunction with the Philadelphia Redevelopment Authority (PRA), are thrilled to provide gap financing for this important project, preserving 184 affordable housing units for the community,” said Gregory Heller, senior vice president of community investment for PHDC. “The Carl Mackley Apartments represented a groundbreaking new approach to worker housing when they were constructed in 1935. We appreciate WinnCompanies’ leadership and partnership to renovate these historic buildings and ensure that they can continue as affordable housing for a long time.”
After pursuing the complex purchase for two and a half years, WinnCompanies acquired the property on January 29 and secured the financing needed for rehabilitation on April 1 with the support of an array of public and private partners, including the U.S. Department of Housing & Urban Development, which partially subsidizes rents and insures the permanent mortgage for the complex, and U.S. National Park Service, which oversees the Federal Historic Tax Credit program.
The project is being financed by tax-exempt bond financing and an allocation of 4% Low Income Housing Tax Credits from the Pennsylvania Housing Finance Agency (PHFA); a U.S. Federal Housing Administration permanent mortgage loan from Merchants Capital Corporation; an investment in the permanent mortgage by the AFL-CIO Housing Investment Trust (AFL-CIO HIT); subordinate acquisition and construction loan financing from the Philadelphia Redevelopment Authority (PRA) and PHDC; equity investment in LIHTC and Federal and State Historic Tax Credits by the Richman Group; equity bridge loan financing from TD Bank; and, energy efficiency rebates from the Philadelphia Gas Work (PGW) EnergySense Program.
“The pandemic has underscored that demand remains high for affordable housing, like that provided by Carl Mackley Houses,” said PHFA Executive Director and CEO Robin Wiessmann. “We appreciate WinnCompanies stepping up to modernize these buildings that offer 184 units of much-needed housing in northeast Philadelphia. We’re glad that funding from the Pennsylvania Housing Finance Agency could help make it possible.”
The renovation work will be performed by union labor. The complex was named for Carl Mackley, a 22-year-old union worker who was shot and killed on March 6,1930 while supporting a strike at the H.C. Aberle Company. The complex earned a spot on the Philadelphia Register of Historic Places in 1982 and the National Register of Historic Places in 1998.
“The preservation of affordable housing is a fundamental priority as we build back our nation’s infrastructure. The Labor Movement supports housing affordable to low- and moderate-income households,” said AFL-CIO HIT CEO Chang Suh. “HIT’s financing for Carl Mackley reflects our continuing commitment to help provide housing for working families and good jobs for union members.”
Spanning an entire city block, Carl Mackley Houses is comprised of four three-story buildings with a range of one-, two-, three and four-bedroom apartments, along with a separate community building with space for resident programming and services. Three quarters of the units (139) offer two or more bedrooms – a critical housing resource as Philadelphia’s supply of affordable family‐sized apartments dwindles. Current residents comprise a diverse mix of household types, including families, disabled individuals and seniors.
“The Richman Group Affordable Housing Corporation is proud to partner with WinnCompanies on the redevelopment of Carl Mackley Houses. We have been involved in the preservation of Carl Mackley Houses for more than 20 years, and we are honored to support WinnCompanies as they modernize and preserve this important affordable housing community,” said Richman Group Assistant Vice President Aaron Wolfe. “Thanks to WinnCompanies and significant funding from a committed group of public and private partners, the 184 units at Carl Mackley Houses will continue to provide attractive, safe and affordable housing in the community for years to come.”
The top-to-bottom renovation will include the restoration and stabilization of the historic brick facades of the buildings and the installation of modern energy conservation systems to reduce utility consumption and promote resident comfort. Sidewalks and walking paths will be improved, and efforts will be made to address erosion and drainage issues.
“Closing a HUD 221d4 loan for Carl Mackley Houses, in addition to providing an interim bridge loan to help acquire the property, was a tremendous success for Merchants Capital,” said Marsha Goff, executive vice president of Merchants Capital’s St. Paul, Minnesota office. “It’s an honor to have provided the financing for the nation’s first federally funded housing development, as access to safe, affordable housing remains a necessity for many Americans to this day. We at Merchants are proud to have partnered on such a meaningful project for Philadelphia.”
In addition to expanding the on-site management offices to create a computer lab for residents, the construction will create an office for a full-time, bilingual community coordinator who will work to connect Carl Mackley residents to services and resources that promote sustainable, positive outcomes for the community.
Working with a network of more than 100 Philadelphia service providers and partners, residents will have direct access to a range of community-based programs and services as part of WinnCompanies’ Connected Communities program. Because of its commitment to impact, WinnCompanies’ was the first for-profit affordable housing development and management organization in the U.S. to earn the Certified Organization for Resident Engagement & Services (CORES) certification from Stewards of Affordable Housing for the Future and Fannie Mae for Connected Communities’ “robust commitment, capacity and competency in providing outcomes-focused resident services in affordable rental housing.”
Carl Mackley Houses will be the first multifamily community in the Commonwealth of Pennsylvania to launch the HUD Family Self-Sufficiency Program. On March 11, 2021, the U.S. Department of Housing and Urban Development approved an innovative plan put forth by WinnCompanies, Compass Working Capital and the Carl Mackley community to support individuals and families in building assets and financial capability as a pathway to greater economic opportunity and out of poverty.
“The City of Philadelphia has been an instrumental partner in this effort, playing a key role in helping us navigate the approvals needed to get work underway,” said WinnDevelopment Vice President Aimee McHale. “We look forward to celebrating the ribbon-cutting at the refurbished community in the fall of 2022.”
WinnDevelopment, the development arm of WinnCompanies, will lead the 18-month renovation with Domus, Inc., serving as general contractor and Kramer + Marks Architects, PC, serving as architect.
“This project was an excellent opportunity for TD to work with a leader in the affordable housing space,” said Gregg Gerken, Head of Commercial Real Estate for TD Bank. “Through our financing work and community programs like Housing for Everyone, we strive to create sustainable affordable housing in the communities where we live and work from Maine to Florida. This is especially important in the face of the pandemic.”
More than 320 residents currently live at Carl Mackley Houses. All apartments are subsidized under the Low Income Housing Tax Credit (LIHTC) program and half fall under the Section 8 program. During the phased renovation, residents will be temporarily relocated while work on their apartments is completed. WinnResidential, the property management arm of WinnCompanies, is now operating the community.
Carl Mackley Houses was partially rehabilitated in 1997 but had fallen into disrepair in recent years, raising concerns about its long-term viability due to a lack of capital investments, inadequate security systems and poor energy efficiency.
In addition to Carl Mackley Houses, WinnCompanies owns and operates three other apartment properties in Philadelphia: Venango House, a 106-unit elderly property; Cobbs Creek, an 85-unit affordable family property; and Breslyn House, a historic 60-unit affordable housing community.