Montebello Apartments
DEVELOPMENT SCOPE
Renovation of a 47-unit affordable housing community to correct water intrusion issues, improve interiors and outdoor spaces, and reconfigure former office space to create two additional apartment units (for a total of 49).
PROJECT OVERVIEW
Washington County–based Bienestar builds housing, hope, and community for Latinxs, immigrants, and all families in need. Located in downtown Hillsboro near transit lines and commercial amenities, Bienestar’s Montebello Apartments provides affordable homes to 49 families, most headed by Latinx immigrants, including roughly 100 school-age children. Residents live in four three-story buildings, connected by common outdoor areas, accessing health care, nutrition, financial literacy, college prep, and other essential services through Bienestar’s Promotores program.
Twenty years old and built to outdated standards, Montebello’s four buildings were suffering from water intrusion issues and failing decks. HDC worked with Bienestar to finance and manage a thorough property renovation, which focused on tearing off and replacing the four building envelopes—sheathing, insulation, windows, and doors—and repairing structural damage caused by water intrusion. The renovation project also improved outdoor areas, refreshed apartment interiors, and added two new apartment units in an area formerly occupied by Bienestar’s office.
Creative Solutions
Finance. To fund $12.5 million in construction and soft costs, HDC’s finance team helped Bienestar to model and assemble a mix of sources that included 4% low-income-housing tax credits, tax-exempt bonds, and Oregon Housing and Community Services (OHCS) affordable housing preservation funds. The development team, tax-credit investor, commercial lender, and OHCS worked together to ensure Bienestar could complete all necessary property repairs and improvements, despite rent-income constraints.
Design and Construction. While replacing the building envelopes, LMC Construction crews discovered that structural damage from water intrusion was worse than feared. Yet, with HDC serving as owner’s rep and carefully monitoring the contingency budget, the team managed to repair the damage and still complete hoped-for property enhancements, from plumbing upgrades to improved outdoor gathering areas. Montebello residents did their part to make the project a success, helping to set renovation priorities and choose new kitchen and bathroom finishes; and temporarily relocating from their homes to accommodate construction. The collaborative effort delivered long-term rewards: a more comfortable living environment and an extended life for a beloved housing community.
SPONSOR
Bienestar
LOCATION
Hillsboro, Oregon
HDC ROLE
Financial structuring and construction management
DEVELOPMENT PARTNERS
→ Scott Edwards Architecture
→ LMC Construction
→ DDV Consulting Services
→ Oregon Housing and Community Services
→ Banner Bank
→ Boston Financial Investment Management, LP
FUNDING SOURCES
→ Low-income-housing tax credit equity (4%)
→ Tax-exempt bonds
→ Oregon General Housing Account Program (GHAP) funds
→ Energy Trust of Oregon
→ Construction and permanent loans
→ Deferred developer fee
SQUARE FEET
Residential: 49,429
Total: 53,742
COST
Construction: $7.5 million
Total Development: $12.5 million
TIMELINE
Fall 2018 to Spring 2020