Combine a non-profit entity with a for-profit and the end result is a profitable win-win for all. The result is Southgate, an affordable housing redevelopment in a blighted area of South Worcester, Mass.

A joint partnership between a non-profit (SWNIC) and a for-profit developer (Mechanic Guild, LLC), Southgate is located in the middle of a residential area and across from an elementary school in South Worcester, within a 1.07-acre footprint.

The area had contained multiple abandoned warehouses, and SWNIC—as part of its neighborhood improvement plan for South Worcester—recognized the need to create affordable housing in a blighted area—it was viewed as a key to improving quality of life and the neighborhood. These particular properties were chosen for affordable housing units because of the proximity to the South Worcester Industrial Park (SWIP), a location that will help provide affordable "work force" housing for the SWIP.

Before looking ahead, first some history: Through the 1930s, these properties were used for residential housing, storage and garages for the nearby foundries. During this time, residential dumping and urban filling of ash occurred on the properties. These parcels were then bought up by lumber distributors for wholesale building supply warehouses. An auto repair shop with gas storage tanks also operated on-site. These uses resulted in lead, petroleum and asbestos contamination. Most recently, the site was used for storage by construction contractors, furniture retailers, restaurant suppliers, and auto repair/ auto body shops. The buildings and properties were completely abandoned in the early 2000s.

An EPA Targeted Brownfields Assessment grant was awarded in 2009, and was used to perform environmental assessments that helped to characterize areas of contamination and prepare for cleanup, which included building debris and asbestos removal. Some building materials (e.g., concrete and masonry) were recycled on an on-site processing facility. With cleanup funded through EPA, a a host of cleanup grants enabled construction to be completed for 25 affordable rental apartments, with two parking spots per unit, and on-site. Occupancy began in June 2011.

Project Distinction:
The site was targeted by the South Worcester Neighborhood Improvement Corporation (SWNIC) as needing action, due to its deleterious affect on the neighborhood. Essentially a service providing organization, SWNIC partnered with a for-profit developer, Mechanics Guild LLC, to both administrate the EPA grant and structure the overall development. This public-private partnership is the key element that drove the project to its successful outcome. The EPA grant money leveraged about $5 million more of investment in the overall project. The EPA grant is split into two Parcels: Parcel II is ongoing with the same partnership. Horne + Johnson Architects is serving as the EPA grant administrator for both parcels.

Primary funding sources/total redevelopment costs:
In addition to the EPA Brownfields Cleanup Grant, several other sources were used. $3.8 million of Tax Credit Exchange Funds were used (part of ARRA). Additionally, leveraged funding includes $750,000 from DHCD; $450,000 from the city of Worcester; $379,000 from CEDAC; and $300,000 from the city of Worcester Neighborhood Stabilization Program (NSP)—all for affordable housing development

Contaminants present:
Petroleum/petroleum products, asbestos, lead (in soils) were all present. The remediation approach was abatement of construction materials, creation of vapor barriers in construction for soils contamination, and general soils management of off site-soils. Total remediation costs were about $120,000.

Challenges:
Shaping of the appropriate end use and the funding of the affordable housing program in a period of great economic upheaval proved to be two bona fide challenges. Originally conceived as a for-sale housing project, the project evolved into an all rental project. The project was initially presented as being funded by Tax Credit Investment, and was awarded these funds by the State Housing office. After this award, the tax credit investment market fell apart; ultimately, which was replaced by the "Tax Credit Exchange Funds."

Financing mechanisms:
The EPA money leveraged multiple grants and loans from public and quasi-public sources, including the Tax Credit Exchange Funds, NSP funds, city of Worcester, HOME funds from the state of Massachusetts and Worcester, and a pre-development loan from the Community Economic Development Assistance Corporation (CEDAC).

Collaboration among project partners:
In addition to the core partnership between the non-profit SWNIC and the for-profit Mechanics Guild LLC, there was extensive collaboration with governmental and funding entities. Local support is a key ingredient in obtaining affordable housing sources, and both elected and administrative officials contributed in moving the project to it’s successful outcome.

Innovative designs and energy-efficient technologies deployed:
Design innovation included the strikingly modern image of the building, which complements the hard-working nature of the neighborhood. In keeping with history of metal working and foundries in the area, the building has extensive use of metal trim. Energy conservation measures include solar shading, energy recovery units, day-lighting in interior spaces, motion and light sensing controls, and EnergyStar compliance. The building received a HERS rating of 49. The domestic hot water system is design for the future addition of solar hot water generation.

Recyclable materials used to classify this as a "green" development featured masonry and concrete materials from warehouses used on-site as fill. The aluminum trim has a high recycled content. The rubber flooring has a high degree of recycled content. The engineered lumber uses wood waste products. The cement siding is recycled content. The concrete has recycled fly ash.

Economic/Social Benefits:
From a job creation standpoint, the project conceived to provide "worker housing" for the nearby South Worcester Industrial Park. The construction provided jobs opportunities for construction, design and housing management industries. The new construction will stimulate additional investment in the community, and additional employments. From a social standpoint, the removal of the abandoned warehouses and replacement with a modern, safe building contributes to creating stabilized neighborhood. The site was a favorite dumping ground - this has been eliminated. Containment of the urban soils will also improve air quality by precluding wind-blown contamination.