Boutique investment firm TerraCotta Group has provided two bridge acquisition loans, totaling $15.4 million, on behalf of Shangri-La Industries (SLI) for two California coronavirus homeless housing projects, the company announced Thursday.
The financing is in conjunction with Project Homekey, a new California program that administers $600 million in state and federal emergency funds for purchasing hotels and establishing permanent supportive housing for people experiencing chronic homelessness who are at risk of contracting COVID-19.
SLI is developer and builder for the projects, located in Salinas and San Bernardino, Calif., that are being completed at a fraction of the cost compared to other affordable housing developments throughout the state, according to TerraCotta. Los Angeles-based SLI partnered with non-profit supportive housing operator, Step Up on Second Street, to manage and provide on-site supportive services at the two locations.
“This was a complicated deal structure involving multiple partners and government agencies,” Darren Cline, managing director at TerraCotta, said in a statement. “We were able to fund the loans within the program’s tight deadline, and are proud that these efforts will result in critically needed housing for individuals who would otherwise experience homelessness or be at risk of homelessness.”
The projects involve converting a combined 180 units into studio and one-bedroom apartments with building modernization and upgrades to meet all current fire & life safety, building code, and Americans with Disabilities Act requirements.
Upon completion, they will provide permanent residency and supportive services for people experiencing or at risk of homelessness in the Salinas and San Bernardino communities.
The Salinas property on 545 Work Street had previously operated as a Good Nite Inn. The first tenants began moving in on Dec. 17th and, as of mid-January, 67 individuals reside in 55 units.
Located at 50 N G Street, the San Bernardino property was formerly an All Star Lodge.
Information about how much the properties were acquired for was not immediately available.