McKinley Inc. receives $29M in HUD financing as CEO eyes more affordable housing
McKinley Inc. closed two major U.S. Department of Housing and Urban Development financings last week worth more than $29 million for two local apartment complexes and company CEO Albert Berriz said an announcement will be made soon regarding a new affordable housing project in Washtenaw County.
"We're going to announce the development of new construction of affordable housing in Washtenaw County," Berriz said, citing a need by the everyday workforce for this sort of housing. "People don't realize how far out some have to live to work great jobs in Ann Arbor. One of the things I think is important is not to just focus on the homeless, but you need workforce housing, too. That's where we focus our energy."
McKinley Inc. has received more than $18 million in HUD loan financing for the Evergreen Apartments at 3089 Woodland Hills Dr.
AnnArbor.com file photo
Although Berriz didn't state where the housing would be, in April, he told AnnArbor.com that McKinley wants to build affordable rental housing on a vacant 4.47-acre parcel on South State Street. McKinley purchased the property about five years ago. It has a 2013 assessed value of $481,900, city records show.
Within its portfolio, McKinley has several affordable housing apartment complexes in the area and the company just received HUD financing for two of them. The Detroit office of Berkadia Commercial Mortgage helped closed the financing.
McKinley received $18.08 million in HUD loan financing with a 3.5 percent rate for Evergreen Apartments, a 477-unit community in Pittsfield Township at 3089 Woodland Hills Dr.
McKinley also received $11.2 million in HUD financing with a 3.5 percent rate for the Roundtree Apartments, a 228-unit community in Ypsilanti Township at 2835 Roundtree Boulevard.
The 35-year, fixed-rate loans will be used to refinance existing debt on the properties.
Berriz said McKinley has had a "very long-term relationship" with HUD.
"We have many properties throughout the country financed by them," Berriz said. "It's a more than 25-year relationship with them. They're a big part of what we do at McKinley."
McKinley and Berkadia have recently originated and together closed more than $200 million in HUD financings for various McKinley communities in various states including Illinois, Indiana, Florida and Michigan.
Berriz said a lot of the affordable housing discussion in Washtenaw County centers around homelessness and not enough emphasis on housing for people within the workforce.
Rent at the Evergreen Apartments ranges between $619 for a 1-bedroom apartment and $999 for a 3-bedroom apartment.
Tenants living in the Roundtree Apartments pay between $669 and $879 for an apartment.
McKinley was founded in 1968 and is headquartered in Ann Arbor. McKinley owns and manages more than 34,000 units and 21 million square feet of commercial space throughout 25 states.
Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.
Comments
Kdx
Wed, Jun 19, 2013 : 5:31 p.m.
Now there getting a handout that they don't need what a joke
John
Tue, Jun 18, 2013 : 7:53 p.m.
So glad the tea party goons just love taking those government handouts, and then turn around and call everyone else out for the same thing!
beardown
Mon, Jun 17, 2013 : 7:04 p.m.
Wouldn't "affordable housing" work better if the landlords just required less money to lease instead of our bankrupt government subsidizing it? I am a fan of the government helping people out, but this is nothing more than a cash making scheme for landlords and housing corps. Built low quality apartment, fail to keep them up, and rake in government dough. Nice work if you can get it.
RUKiddingMe
Mon, Jun 17, 2013 : 7:03 p.m.
Is there any end in sight for this affordable housing business? Once the city reaches 20, 30, 50% are they done? Or will affordable housing continue sucking vast amounts of tax and grant dollars from the economy at large? Also, how do I get on a list for affordable housing? I'd like one of those newish condos on Main street. I think I'll quit one of my jobs, that should about put me where I need to be. With so much less to pay, I can finally take smoking back up.
GratefulReb
Mon, Jun 17, 2013 : 4:22 p.m.
this will not bode well for the safety issues downtown is already experiencing.
Dog Guy
Mon, Jun 17, 2013 : 2:28 p.m.
More section 8 housing will attract more of Hieftje's "young professionals" to Ann Arbor.
Basic Bob
Tue, Jun 18, 2013 : 1:58 a.m.
Someone needs to make the latte.
obviouscomment
Mon, Jun 17, 2013 : 1:38 p.m.
McKinley is so hypocritical. Sure they look great when they take over a dilapidated property and put a new coat of paint on the outside and some nice landscaping to make it look appealing to passersby. But they let the structures go to rot and tell out right lies to the residents when issues are brought to their attention. We had proof of the issues from contractors that McKinley had hired to come do patch jobs on things. When we presented the proof to management they refused to acknowledge what was right in front of their eyes and would say these fixes were not in the budget but then they would point out all the work they did that year on the landscaping and pool and renovated club house. The property manager even said: "Don't you appreciate it when your friends and family come and see how nice everything looks as they're driving to your apartment?" Our response was: "Yes that's all very nice, but we'd rather our apartment be in such good condition." They need to be getting loans to repair properties they already own instead of taking on more properties that they will run into the ground. And if you think that their new construction will be "affordable" think again. They run specials for the first 6 months-1 year and after that you have to move because the rent skyrockets to a ridiculous rate. We moved to a complex that didn't do these kind of specials so technically we pay higher rent but we have the same square-footage with a full size washer and dryer and our utilities are way less than what they were at McKinley properties because the buildings here are properly maintained and energy efficient. We do not live in a newly constructed complex. Because our heating costs in our approx 900 sq ft apt at a McKinley property were rivaling what our friends in a 3200 sq ft home were paying, we actually save money paying higher rent at our new apartment. Companies like McKinley are more the problem than the solution when it comes to our "
obviouscomment
Mon, Jun 17, 2013 : 9:12 p.m.
@A Voice Of Reason Guess what, when you sign their lease you are stuck unless you have the money to pay the rent for the rest of the lease when you move out early. Tenants in Michigan have rights and the property owners must take care of the properties they own and they can be held accountable if they don't. After doing extensive research, we found that for some of the issues we were having we could put our rent in an escrow account until they fixed them. We told them we planned on doing this and suddenly they were more willing to work with us because they knew they were in the wrong and now they weren't dealing with an idiot. They still didn't fix the problem completely and we could have pressed harder and that is the only mistake I will take responsibility for. We aren't "blaming everyone else" for these issues. This problem needs to be made known. Too many tenants feel that they have no choice but the laws in Michigan are strictly in favor of the tenants and if more people were aware of their rights and acted on them then companies like McKinley wouldn't be able to screw so many people over. You don't have to tell me that not everyone can afford to live in Ann Arbor, I know I can't. That McKinley property I was living in was in Ypsilanti. And this whole article is really about how McKinley is supposed to be trying to provide more affordable housing. I'm confused by your comment because it seems to be in McKinley's favor but you also seem to be saying that if you cannot afford to live in Ann Arbor you should go somewhere else which is what McKinley claims to be fighting against. What side are you on anyway?
obviouscomment
Mon, Jun 17, 2013 : 9:06 p.m.
@sirotan We lived at Schooner Cove in Ypsilanti Township. In my apartment searches I've found that apartmentratings.com has good honest ratings. A word of warning though, I am convinced that McKinley property managers and employees go on here and give reviews of their properties but I can always spot them because the review will sound remarkably similar to a sales pitch or to the ads they post for their apartments on craigslist.
A Voice of Reason
Mon, Jun 17, 2013 : 6:53 p.m.
Guess what, no one is making live at a McKinley property and once you live there, they do not lock the door so you cannot leave. Also, last time I checked, there are lots of places to live. Be a grown-up and take responsibility for your choices and stop blaming everyone else. Secondly, new housing complexes are coming to town and building $1700 per month for college students because that is where the money is. Not everyone can afford to live in Ann Arbor because of the taxes and number of people willing to pay a premium for nice housing.
sirotan
Mon, Jun 17, 2013 : 6:31 p.m.
obviouscomment, any chance you can share what complex you moved to from the McKinley property? I've been searching for a new place for months now without much luck and am always looking to read actual reviews instead of taking a chance at an unfamiliar complex. If you don't want to share the name publicly, can you email it to me at M8R-77jo2e@mailinator.com ? Thanks.
obviouscomment
Mon, Jun 17, 2013 : 1:41 p.m.
Continued... "affordable housing" issues. AA.com needs to fix the warning about how many characters are allowed in the comment because it said I had something like 8 characters left but then when I posted it deleted the end of my sentence.
Jay Thomas
Mon, Jun 17, 2013 : 1:37 p.m.
I continue to think that McKinley has too much of a share of this market giving it an unfair advantage in pricing its units. If you want to grow then seek other markets to compete in, but do not dominate one market. The state should enact some kind of anti-trust law to limit the sharks who would gobble up everything.
Topher
Mon, Jun 17, 2013 : 12:21 p.m.
Wasn't it McKinley who launched a big campaign against the education millage in 2009 because they didn't want property taxes raised on all of their housing properties that hadn't yet sold? But now they'll take this financing handout from the federal government. I just feel like there's a really good story here, considering that Ron Weiser was the former chairman of the Michigan Republican Party and his wife, Eileen Weiser, is on the State Board of Education. Conflict of interest?
A Voice of Reason
Mon, Jun 17, 2013 : 6:57 p.m.
Guess what, if taxes go up, so does rent--common sense here! Seems to me that voting against the education millage helped people pay their rent--seems pretty nobel to me! The same apartment in Ann Arbor rents for $50 less in Livingston County because of the tax difference. What is the exact conflict of interest with Eileen Weiser being the St. Board of Education in your statement. The millage was a county millage, not a state millage. Hud is a federal program run by the Democratic party. I am not following your argument at all other than you just want to point a finger because you are mad.
Mostly Purple
Mon, Jun 17, 2013 : 11:47 a.m.
Does HUD know that McKinley's owner, Ron Weiser, is a billionaire who just made a name for himself by referring, at a secretive Tea Party meeting, to African American voters in Detroit as "those people"? http://www.annarbor.com/news/gop-operative-ron-weiser-of-ann-arbor-in-hot-water-over-remarks-about-detroit-voters/ Weiser is also one of the chief architects of Michigan's so-called "Right to Work" legislation. And does HUD recall that McKinley CEO Albert Berriz, besides being a multimillionaire, has repeatedly made a name for himself by fighting to defund public education? Interesting that Weiser and Berriz have benefitted for decades from HUD, but in their spare time are anti-public education and pro-Right to Work activists.
eagleman
Mon, Jun 17, 2013 : 12:39 p.m.
Considering that public education has been subpar for decades I would say that teachers unions have been anti-student. And only those who stand lose financially(Union leaders) are upset with Right-To-Work. As an union worker myself I know full well how corrupt unions are. That said, both men sound like real jerks. I have lived in McKinley apartments before. They are not worth $900 a month.
Mich Res and Alum
Mon, Jun 17, 2013 : 11:36 a.m.
McKinley and affordable housing don't belong in the same sentence. In February I signed a pre-lease with them and they said the apartment I looked at would be $850 a month. Now, the pre-lease did say 850 - 899 in rent, but I was promised the apartment I looked at would be 850. Fast forward to two days ago and they tell me it will be $899 a month and they give me some BS reason that it is more expensive, even though it was the exact apartment that I was told would be 850. In Feb, I was told one reason they needed to put the range of prices on there was that apartments with new cabinets cost an extra $50. Did mine come with new cabinets? Of course not. Liars and crooks. Just because people live in Ann Arbor doesn't mean they should have to pay 900 for a crappy, 1 bedroom apartment.
Jay Thomas
Mon, Jun 17, 2013 : 1:59 p.m.
It's affordable for McKinley; they get a subsidized interest rate to acquire their properties and then rent them out to people on section 8 (where the government pays 85% or something of the rent). The only people it's unaffordable for are the real renters (who pay for it themselves) and the real taxpayers (who are doing the subsidizing).
missmisery
Mon, Jun 17, 2013 : 11:29 a.m.
I'm still waiting to hear what McKinley feels is "affordable" for a 1 bedroom, 2 bedroom and 3 bedroom. If they feel the rents at Evergreen and Roundtree are affordable, I beg to differ. I'd also like to see the terms of the financing, ie: what HUD requires of them in receipt of the funds.
Technojunkie
Mon, Jun 17, 2013 : 11:24 a.m.
So we're taxed to the breaking point so that government can bring rental costs down to above where they'd be if they just left us alone in the first place. But corporatists make a buck and bureaucrats get paid. Yay corporatism. Seriously, anyone who doesn't understand that affordable housing is impossible when property taxes are so high should stay out of government. And the voting booth for that matter.
thehawk
Mon, Jun 17, 2013 : 10:50 a.m.
I have rented from McKinley before, but never again. Had to clean both places before I moved in because they were nasty, and they kept my deposit when I moved out, even though they assured me I'd get it back. Both places were cleaner and in better repair when I left than when I moved in. They lie about anything, and come into your apt without notice for reasons they could not explain (I had a cat I didn't want to get out). These are the nice people that dump people's belongings at the side of the road, taking taking care to do as much damage as possible to it in the process.
obviouscomment
Mon, Jun 17, 2013 : 8:43 p.m.
@Nicholas Urfe I considered contacting others living at the property I was at (not Evergreen). I really think an attorney would make a killing taking this on.
Nicholas Urfe
Mon, Jun 17, 2013 : 5:37 p.m.
Same experience with them. Class action?
Jay Thomas
Mon, Jun 17, 2013 : 1:51 p.m.
There is no point in cleaning because they will take your damage deposit regardless. I saw the apartment of a friend professionally cleaned and they still pulled that.
Little Patience
Mon, Jun 17, 2013 : 1:50 p.m.
I had the same issues (lived in Evergreen about 12 years ago). The apartment was disgustingly filthy when I moved in, the linen closet door was barely hanging on (took 4 calls and a warning that my young nephew was over often & could get hurt) before they fixed it. Came home one day and they replaced the counters. All well & nice, except that all of my dishes & pots underneath got filthy and they left my microwave on top of the fridge. A little notice would have been nice.