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Construction starts on $11M apartment project

By , - Last modified: September 20, 2013 at 10:18 AM
Officials break ground for the new $11 million SouthSide Lofts project under construction next week. The 46-unit affordable housing community will be at this site on Atlantic Street and nearby Hayes Street in SouthSide Bethlehem.
Officials break ground for the new $11 million SouthSide Lofts project under construction next week. The 46-unit affordable housing community will be at this site on Atlantic Street and nearby Hayes Street in SouthSide Bethlehem. - (Photo / )

A new $11 million project under construction next week is expected to bring in the “creative class” to SouthSide Bethlehem.

Dubbed SouthSide Lofts, the 46-unit affordable housing community is geared for boosting the city’s economy by bringing in artist residents who would walk to nearby restaurants, the ArtsQuest Center at SteelStacks, Lehigh University, Sands Bethlehem Casino, Banana Factory and other establishments.

Officials announced details of the project at a press conference Thursday that marked the groundbreaking for a plan that was in the works for several years.

One apartment site will be at the vacant church site at 419-429 Hayes St. in Bethlehem and a second will be at a brownfield site at 420-424 Atlantic St., a block away.

“This is our first project from the ground up in the Lehigh Valley,” said Michael Carper, president of Housing Development Corp. MidAtlantic, a nonprofit based in Lancaster. “The funding for this is a scarce resource.”

Carper said the company will adaptively reuse the existing 100-year-old church on Hayes Street, demolish the adjacent rectory and build a new apartment site. At the Atlantic Street location, the company will take down two existing blighted buildings and build new apartments.

One parking space will be available for each residential unit at both sites. The company acquired a vacant lot across from the Atlantic Street location for off-street residential parking.

The project should be completed by September 2014, Carper said.

Caldwell, Heckles and Egan Inc. of Lancaster is the construction management company for the project.

Monday, the company will start abatement work at the rectory, followed by excavation, said Peter Egan, president of the construction firm. About 50 to 60 workers will be on site once construction gets underway, with Ron Miller as superintendent and Tim Sherman as project manager, Egan said.

The housing community will have a preference for artists, many of whom are struggling, often working two to three jobs to support their vocation, Carper said. HDC will form a committee to determine which artist residents can live at the site.

Arts such as pottery making or welding, which require fired kilns or blazing torches would not be permitted at the site.

Wells Fargo Bank is the investment partner in the deal, providing $8.8 million for the project, Carper said. The bank will be the company’s partner for 15 years, Carper said.

Mayor John Callahan said Bethlehem could not be healthy, economically, if it did not focus on its workforce housing component.

This housing community would serve those who earn at or below 60 percent of the area median income, which Callahan said would be about $43,000 per year.

“That’s the income for the folks who would be eligible to live here,” he said.

Maximum rents would be $1,050 for a three-bed unit, $850 for a two-bed and $750 for a one-bed unit, said Ian Rawhauser, development officer for HDC.

Callahan said the development would help the city meet its affordable housing needs. Bethlehem provided $700,000 to support the acquisition and construction/build-out of the project.

“This is a great re-use of a church and they will repurpose the church to serve as a community gathering place,” Callahan said.

State Sen. Lisa Boscola, who grew up on Hayes Street, said without the tax credits approved for the project, “we would not be standing here today.”

Brian Hudson, executive director and CEO of Pennsylvania Housing Finance Agency in Harrisburg, said the agency funds one out of every four affordable housing projects that come in, noting that projects such as these improve communities. He said the tax credit request came to $868,343.

Out of 47 projects submitted to the PHFA in 2012, South Side Lofts was one of 17 developments that earned tax credits.

HDC, which will own and manage the properties, said the development includes a geothermal heating and cooling system at both locations, with capacity to serve all of the residential units. The development covers an estimated 46,800 square feet.

The 18-35 age range is the Bethlehem’s largest growing demographic, which any city would want, said Kassie Hilgert, senior vice president of marketing and advancement at ArtsQuest.

When ArtsQuest found out about the project, the organization wanted to throw its support behind it, she said.

“It’s the support that makes those ideas turn into a reality,” Hilgert said. “This is certainly an ambitious vision.”

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Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 4108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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