KeyBank Secures $38M in Financing for Renovation of Biltmore Towers in Dayton, Ohio

DAYTON, Ohio — KeyBank has arranged a $38 million financing package for renovations to The Biltmore Towers, an affordable housing community in Dayton.

KeyBank Community Development Lending and Investment (CDLI) secured a $6 million equity bridge loan and KeyBank Real Estate Capital’s (KBREC) Commercial Mortgage Group secured $16 million of fixed-rate Fannie Mae financing. Additionally, the Key Community Development Corp. provided $16 million of low-income housing tax credit (LIHTC) and historic tax credit (HTC) equity combined.

St. Mary Development Corp. and Related Cos. are leading the redevelopment project.

Built in 1929 as the Dayton Biltmore Hotel, The Biltmore Towers is an affordable, 230-unit, 18-story, age-restricted, mixed-use building. In addition to affordable residences for seniors, the historic landmark features more than 23,000 square feet of community space and more than 14,000 square feet of commercial space.

The renovation program — which focuses on environmental sustainability, historic preservation and amenity improvements — will include upgrades to the interiors of the apartments as well as the common areas and community spaces. It’s anticipated that no tenants will be permanently displaced during the renovation, which will take about 18 months.

Given the projected total renovation costs of approximately $18.5 million, the MBS as Tax Exempt Bond Collateral (MTEB) loan is being underwritten as Moderate Rehab Loan. About 55 percent of the renovation budget is allocated for the interior, including upgrades to cabinets, counters, fixtures, appliances, showers, toilets, flooring and offices. The grand entrance stairway also will be refurbished.

The project will include a new fitness center and clinic areas for residents to allow for visiting nurses to provide physical therapy. Exterior improvements include windows, façade repairs and landscaping.

St. Mary Development Corp. and Related Companies are participating in Fannie Mae’s Green Rewards Program, with a green improvement budget of $1.5 million. The improvements are estimated to help reduce energy costs 20 percent and water costs 30 percent. Additionally, the project is participating in Fannie Mae’s Healthy Housing Rewards Enhanced Resident Services Program, which promotes the health and wellbeing of tenants in affordable housing through resident services.

As part of the LIHTC syndication, an existing land use restrictive agreement (LURA) will restrict all units to those earning 45 percent of the area median income (AMI). A new LURA will restrict all units to those earning 60 percent of the AMI. All units are covered under a Housing Assistance Program (HAP) contract that was renewed for a new 20-year term.

Additional financing includes a partially assumed loan, existing reserves and a deferred developer fee. Other financing partners include the Dayton-Montgomery County Port Authority, which provided the tax-exempt bond volume cap, and the Ohio Housing Finance Agency, which allocated the LIHTCs. KeyBanc Capital Markets served as bond underwriter.

“St. Mary Development is excited to be working with Related Companies and KeyBank to bring the Biltmore Towers back to its former glory,” said Wes Young, Executive Vice President of St. Mary’s Development Corp. “We’ve been serving residents there through service coordination for more than six years and are thrilled to be partners in the rehabbing of the apartment community.”

Kyle Kolesar and Victoria O’Brien of KeyBank’s CDLI team and Tabare Borbon KBREC’s Commercial Mortgage Group structured the financing.