Sockeye secured a forward commitment under the Fannie Mae DUS Program for a Fannie Mae AAA-rated credit enhancement for $20,000,000 of fixed-rate tax-exempt bonds and $8,400,000 of variable-rate taxable bonds issued by the City of Portland. The transaction also provides an earn-out feature for an additional $1,500,000 of taxable bonds, which could potentially bring Fannie Mae's total credit enhancement to $29.9 million.
U.S. Bank will act as the construction lender and will provide credit enhancement for the bonds during construction and lease-up with the bank's Letter of Credit. The transaction was underwritten to 83.5% of the project's stabilized loan-to-value upon completion and a 1.25x DSCR. The interest rate on the 30-year tax-exempt bonds was locked at 6.35% while the interest rate on the variable rate taxable bonds will reset every 30 days.
Sockeye Development is a local company best known for the $14-million redevelopment of the old Carnation Dairy site at Southeast 33rd and Belmont in Portland, which was recognized with the Governor's Livability Award. The transaction was originated by Todd Harding of Green Park Financial correspondent Norris, Beggs & Simpson, a local commercial real estate services firm. Bethesda, Md.-based Green Park Financial committed and closed.
The entire Museum Place project is a $100 million mixed-use redevelopment project on a three-block area between 10th and 11th streets just west of the downtown core. Most of the work will occur on the superblock that now holds the YWCA, the St. Francis Apartments and a Safeway Food & Drug store. The just financed part of the project will occur on the block immediately to its south, across Jefferson Street. The project is on the new streetcar line and in close proximity to the Portland Art Museum, Portland State University, the Oregon History Center and the Portland Center for the Performing Arts.
Ultimately, Museum Place will add up to 310 units of mixed-income apartments, more than 200 market rate condominiums, 73,000 sf of retail space (including the new Safeway), parking, office space and a renovated YWCA. The condominiums will be built on the site of the current Safeway beginning in 2003, and the Housing Authority of Portland at last word plans to rebuild the aging St. Francis Hotel beginning this spring, providing 130 low-income apartments. Also slated to get under way in 2003 is a stand-alone mixed-use building called Madison Place that will be located on the 6,500-sf parcel south of the St. Francis Hotel. It will include ground-floor retail topped by office space or housing or both.
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