Leading financial services provider Merchants Capital announced $25.5 million in debt and equity financing for the construction of Prairie Pointe, a 42-unit affordable and supportive housing development in Shakopee, Minnesota.
Merchants Capital provided $14.1 million in 9% Low-Income Housing Tax Credit (LIHTC) equity and secured a $11.4 million bridge loan from Merchants Bank for the construction of Prairie Pointe.
Developed by leading Twin Cities-based developer Beacon Interfaith Housing Collaborative (Beacon), Prairie Pointe is the only housing development in the area offering on-site supportive services and rents restricted at 30% Area Median Income (AMI). Twenty-eight units will be permanently set aside for people experiencing homelessness and/or people with disabilities, and 14 affordable units will be restricted at 50% AMI. The permanent supportive housing units will operate under the Minnesota Department of Human Services Housing Support rental subsidy program through Scott County, as well as private subsidy provided by Beacon. Volunteers of America Minnesota and Wisconsin (VOA) will provide on-site supportive services.
“It was a privilege to lean into Merchants’ in-house equity expertise and collaborative process to structure this transaction for Prairie Pointe,” said Joseph Krengel, Senior Vice President of Originations at Merchants Capital. “Beacon is making remarkable strides in providing comprehensive affordable housing solutions throughout the Twin Cities, and we look forward to future collaborations.”
“Beacon’s multi-faceted approach is extremely successful in helping communities, and we are proud to partner in this effort to bring additional affordable homes to the area,” said Kelly Berg, Vice President of Acquisitions at Merchants Capital. “The deep affordability and supportive services available at Prairie Pointe will provide great relief for tenants, as well as serve the critical need for affordable housing in the larger community.”
Prairie Pointe will include 1-, 2-, 3- and 4-bedroom units with fully equipped kitchens, laminate countertops, vinyl and carpet flooring and laundry rooms on each floor. Community space includes a gym, donations room, computer and study rooms, children’s playroom and playground. Beacon’s service partner will provide onsite case management, housing stability skills, employment assistance, mental health support and educational programming as needed for residents.
“We’re so proud to be bringing 42 affordable homes to Shakopee to serve families who have experienced housing insecurity. We know that stable homes are the key to helping parents and children flourish, and for communities to thrive,” says Beacon CEO Chris LaTondresse. “And these homes will be made stronger through our partnership with VOA. They have a proven track record of providing high-quality and responsive supportive services to families and individuals to help people meet their goals, achieve housing stability, build their income and access health and community services.”
Beacon has provided 950 affordable homes and more than 400 LIHTC units to the Twin Cities. More than 650 of these homes are supportive housing, with on-site supportive services available to residents.
