Opportunity Zone investors advance 256-unit apartment project in South Portland
Courtesy / URS Capital Partners
The 256-unit market-rate Clark’s Pond apartment project in South Portland, which was approved by the city’s Planning Board last June, has picked up additional investment funding that will enable developer Vincent Maietta to complete the construction in 24 months instead of in phases as originally planned.
The 256-unit market-rate Clark’s Pond apartment project in South Portland, which was approved by the city’s Planning Board last June, has picked up additional investment funding from Opportunity Zone investors that will enable developer Vincent Maietta to complete the construction in 24 months instead of in phases as originally planned.
Maietta told Mainebiz in a phone interview that his project at 450 Clark’s Pond Parkway — near Home Depot, the Maine Mall and Interstate 295 — picked up additional private financing through URS Capital Partners, a multifamily real estate investment company based in Huntington, N.Y., that acquires value-add apartment complexes as well as Opportunity Zone projects throughout the Southeast and Northeast.
Maietta said that he and Daniel Greenstein, his development partner on the Clark’s Pond project, were approached by URS Capital Partners after his project had begun the local permitting process and after the designation of the South Portland neighborhood as one of 32 Opportunity Zone districts last May. A new economic development program established under the Tax Cuts and Jobs Act of 2017, the designation provides a federal tax incentive to invest unrealized capital gains in so-called Opportunity Funds.
“Dan and I decided to join forces with URS to facilitate the financing and construction of the project,” Maietta said. “They are a bigger company, with more financial resources, and it made an easy and fantastic fit for this project.”
The $50 million to $60 million Clark’s Pond apartment project, Maietta said, originally was envisioned as being built in phases, with the 256 units being built in four, six-story apartment buildings that would include 212 two-bedroom units and 44 one-bedroom units. Then came the Opportunity Zone designation, followed by an overture from Christopher Urso, managing partner of URS Capital Partners — which describes itself as and “early adopter of the Opportunity Zone strategy, working with tax professionals to prepare the necessary infrastructure to employ these powerful tax benefits. Rather than relying on the tax benefit alone, URS’ focus is to find truly viable projects that the Opportunity Zone regulations will further enhance.”
“Without their help, we would have had to do this in phases,” Maietta said.
In a news release announcing its Opportunity Zone financing of the South Portland project, URS Capital Partners stated that it “was able to utilize a combination of private equity sourced through URS' private network of high net worth investors combined with a construction loan from Bar Harbor Bank.”
Managing partner Christopher Urso, who founded the company in 2008, said in the news release that Maietta’s project fit its criteria of investing in strategic multifamily projects with solid potential.
"The South Portland market is severely underserved with the occupancy rate hovering around 95%,” he said, noting that ground was broken this month, with construction to take 24 months to complete. “With carefully selected finishes and attention to attractive floor plans, we plan on Latitude at South Portland becoming a best-in-class asset, offering the amenities of the properties in the city center of Portland at an attractive price point only 10 minutes away from downtown. Our business plan is to hold the asset for 10 years to maximize the Opportunity Zone benefits."
Urso said URS Capital Partners’ total acquisitions to date are more than $250 million.
“We are looking to continue our growth in 2019 as we pursue additional more traditional value-add opportunities as well as Opportunity Zone projects that are well located within our targeted markets," he said.
William Mann, South Portland’s economic development director, told Mainebiz in a telephone interview that the turn of events for the 256-unit Clark’s Pond apartment project will help the city address “a tremendous need for affordable housing” in the region.
“We are pleased to see construction begin,” he said. “From the city’s perspective, we are pleased to see the Opportunity Zone designation for the western side of South Portland has garnered the additional investors in The Residences at Clark’s Pond. These are market-rate properties … This is a positive step forward.”
Maietta said the first of the four apartment buildings would be completed in 12 months, with rentals ranging from $1,200 to $1,500 for the apartments.
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