Riverside redevelopment marks milestone as housing breaks ground
WILMINGTON – Marking a milestone in a longtime effort to revitalize the Riverside community in the city’s northeast, the first phase of housing development is getting underway in the massive redevelopment project.
Led by the nonprofit REACH Riverside and partnering with the Wilmington Housing Authority and developer Pennrose, the first phase will build 74 one- to four-bedroom townhouses within the next 18 months. Site work has already begun near the intersection of Rosemont Avenue and Todds Lane, and construction will begin in earnest soon at the vacant site, said Logan Herring, CEO OF REACH Riverside.
“Housing is critical,” he said, noting that it’s the foundation on which communities are made.
The master-planned redevelopment in the Riverside neighborhood, which largely bounds Northeast Boulevard and the Brandywine Creek to the city limits, is designed with the principles of “purpose-built communities,” a holistic approach of housing, education and health care meant to tackle areas of concentrated urban poverty.
Once complete, the entire Riverside redevelopment will include 600 high-quality, mixed-income rental and for-sale homes along with a new Kingswood Community Center and Early Learning Academy that will serve as the foundation of a cradle-to-college/career education pipeline for the community. The Warehouse, a teen-designed, co-working and service delivery space focused on serving the city’s teen population, as well as EastSide Charter School also serve the greater community.
The new townhouses will feature 59 units available to tenants with incomes up to 60% of area median income (AMI) and 15 workforce housing units. A two-bedroom apartment will cost about $900 a month at market rate, with subsidies defraying much of that cost for those who meet income eligibility thresholds, Herring noted.
The existing residents of the roughly 300 Wilmington Housing Authority (WHA) units in Riverside will have right of first refusal, Herring said, which will also help the project managers move residents out of the existing homes so they can be razed and rebuilt in coming years of the eight-phase project.
In conjunction with the new housing, REACH Riverside is also starting a new EMPOWER initiative. The nonprofit will invest $1 million a year for three years to help educate, mentor, and prepare residents, Herring said.
“So, they have the opportunity to take advantage of the new homes, and not just be subsidized but continue to climb the economic ladder,” he explained. “Then, when they are prepared, they can do the market rate and eventually homeownership units that will be built down the line.”
The ambitious project is partially financed through an allocation of low-income housing tax credits (LIHTCs) from the Delaware State Housing Authority, which also contributed construction and permanent debt. Those valuable 10-year tax credits are being purchased by Cinnaire, which also provided permanent financing, while REACH Riverside, the WHA, the city of Wilmington, New Castle County and M&T Bank also provided critical financing.
The LIHTCs funded about half of the $20 million needed for the first phase of residential building, Herring said, and a second allocation of credits has been obtained through the competitive application process for the second phase of 67 more units.
REACH Riverside is also beginning to fundraise an estimated $30 million for a new 70,000-square-foot Kingswood Community Center, which provides social services to the community’s residents. In total, Herring’s group has raised about $20 million toward its goal of $44 million to fund the community center as well as the TEEN Warehouse, which provides educational assistance and support.
One byproduct of the difficult 2020 and the conversations taking place around racial inequality and equity of opportunity has been increased attention on REACH Riverside’s project, Herring said.
“The argument for the work that we’re doing is clearer and more people are aware of the inequality that has been pervasive throughout this country for hundreds of years,” he said.
Pennrose, which also developed and recently sold The Garrison apartment complex in New Castle, is well-versed in the development of affordable housing communities, having built over 18,000 units of housing in 230 communities across 15 states.
“We have a long history of partnering with housing authorities and community organizations to deliver really transformative neighborhood redevelopment projects, so this really felt right within our wheelhouse,” said Jacob Fisher, Pennrose’s regional vice president for New Jersey and Pennsylvania. “What we look for in a large-scale development is the ability to make an impact.”
Fisher said that Pennrose was willing to get involved with the long-haul Riverside project that will likely be developed over a decade because of the quality of the partners involved, including REACH Riverside, Purpose Built Communities, the Wilmington Housing Authority, and more.
Pennrose doesn’t expect the COVID-19 pandemic to delay the Riverside project – it’s on pace to close 18 other projects this year – but it is monitoring material costs, which have been rising as inventories depleted by shutdowns early in the pandemic have been slower to meet booming demand for building.
“Lumber prices have been going crazy lately,” Fisher said, noting that developers have to watch inventories and strategically price purchases right now.
The risks of shutdowns and material costs amid the pandemic may also play into contractor pricing, offsetting what would likely be a more competitive bidding process for the large project expected to create about 125 construction jobs, he added.
A brighter future
Mayor Mike Purzycki recalled getting an early look at the outcome of the Riverside redevelopment when he was executive director of the Riverfront Development Corporation. He accompanied REACH Riverside Board Chairman Charlie McDowell, Wilmington developer Rob Buccini, and former Wilmington Housing Authority Director Fred Purnell to Atlanta to see the original Purpose-Built Community designed by noted developer Tom Cousins.
“What we saw was really inspiring down there,” he recalled. “[Cousins] had this concept of building a community – not just the neighborhood itself but building neighbors too. They were trying to build human capital along with the sticks and bricks, and what they did was pretty remarkable.”
The mayor is optimistic that after businesses and developers see the progress at Riverside they will want to invest in the changing community, especially along the Northeast/Governor Printz Boulevard corridor that runs through the heart of the area.
“Really Riverside has just been a beleaguered part of town for some time and so we’ve worked with the housing authority to try to move away from the old public housing model to something more imaginative,” Purzycki said. “I think this is it, so we’re really optimistic about the future of the whole REACH project.”