Local and state officials gathered Tuesday for a ribbon cutting at Estrella Landing, an affordable housing development off of Gordon Road boosted by an $8.4 million low-income housing tax credit investment from Live Oak Bank.
The 84-unit project developed by Terroir Development LLC opened this summer at 4611 Gordon Road, according to a news release issued Tuesday. The property, which is fully leased, includes three residential buildings with one-, two- and three-bedroom units restricted to residents making 30% to 60% of the area's median income.
Terroir Development closed on the equity with Live Oak Bank in Dec. 2022, according to Stephanie Norris, who developed the project with her mother and business partner Joan Norris.
Upon closing, "Live Oak Bank became the 99.99% owner of Estrella Landing Apartments LLC, as the investor member and Terroir Development retained 0.01% ownership, as the managing member," Stephanie Norris wrote in an email to the Business Journal.
"Closing with LOB commits their $8.4M investment (cash), as long as Terroir performs all duties required in the operating agreement," Stephanie Norris added. The equity will be paid out over five installments after Terroir meets certain milestones, including full construction completion and the closing of a permanent loan.
According to the N.C. Housing Finance Agency, low-income tax credits allow property owners to lower their property’s debt financing by exchanging tax credits for equity investments from major financial institutions.
“Live Oak is proud to make an investment in affordable housing in our own community,” Live Oak Bank President William C. (BJ) Losch III stated in the release. “We believe supporting affordable housing directly impacts workforce development and advances the opportunities of residents of our region.”
Stephanie Norris submitted an initial tax credit application for the project in Jan. 2021 and received it in Aug. 2021. At the time, the impacts of the COVID-19 pandemic created additional obstacles to financing an affordable housing project, she said Tuesday.
“We were still in COVID. We were seeing construction costs continuing to rise with no end in sight. We were seeing gaps in funding as a result and needing help,” Stephanie Norris said. “That’s the world we were living in in August of 2021.”
In Feb. 2022, Stephanie Norris connected with officials from Live Oak Bank and by the end of 2022 closed on the low-income housing tax credits with the banking firm. Live Oak Bank is the sole investor in Estrella Landing, Stephanie Norris said.
This is the first time Live Oak Bank has provided low-income housing tax credits, said Greg Seward, Live Oak Bank's general counsel and chief risk officer, but the company wanted the chance to invest in the Wilmington community.
"We at Live Oak believe that affordable housing is fundamental to our local economy and that it can actually be done successfully and responsibly through coordinated efforts with groups like all those that are represented here today," Seward said. "Successful projects like this, they drive the local economy, they provide job growth, financial security and a place for folks to come home to at night."
Norco Management Holding Inc. will serve as the complex’s property management firm and oversee its leasing and operations. The firm specializes in affordable housing developments for families and seniors across North Carolina.
Investment from Live Oak Bank and other funding from Cape Fear Collective, New Hanover County, N.C. Housing Finance Agency and the N.C. Office of Recovery and Resiliency have created a public-private partnership that directly benefits Wilmington residents, Stephanie Norris said.
“I am beyond excited that Estrella Landing is owned and managed by companies based in New Hanover County,” Stephanie Norris said in the release. “In my 20 years of affordable housing development experience, this is a rare opportunity for a partnership like this to occur and we hope for more to continue. Our team’s sole mission is to create safe and attractive housing that our residents are proud to call home.”
