McKinley School, built in 1940, at 640 Plum St., Wyandotte, is listed on the National Register of Historical Places, and is slated to be converted into market-rate senior housing.
Coachlight claims pandemic delayed financing
By SUE SUCHYTA
Sunday Times Newspapers
WYANDOTTE – The City Council voted to extend Coachlight Properties LLC’s contract at its Sept. 14 meeting, allowing more time to secure financing to convert historic McKinley School into market-rate senior housing.
Under the amendment, Coachlight must secure financing by March 1, 2021, and will adhere to the balance of the original timeline, unless additional changes are approved by the city council.
Joe DiSanto of Wyandotte, managing member of development group Coachlight Properties LLC, of the Jonesboro Investments Corp., spoke at the Sept. 14 meeting to request an extension.
“I know we have been working on this for quite some time, and the perception out there in the community is that we haven’t done anything,” he said.
He said architectural drawings, building and roof analysis, environmental reports and environmental studies have been completed.
“Pretty much everything but the financing has been started and is moving forward,” DiSanto said.
He said that six months ago, the U.S. Department of Housing and Urban Development changed its policies, which now permit financing for housing for memory care, assisted living and independent living housing units.
DiSanto said an updated market analysis for HUD, required for financing, produced a positive result. However, when the COVID-19 pandemic hit, he said HUD shut down all financing, including senior program assistance, while it works on personal protective equipment concerns.
He said they have approached private equity firms for financing, who required additional market analysis.
“If we can get the private equity to come forth with financing, then we will move the project forward,” DiSanto said. “That is the issue at hand right now.”
He said Coachlight’s agreement with the city, which will enable it to
take title to the McKinley School property, requires the submission of a building permit, to obtain site plan approval, obtain all the entitlements, including a performance bond, which he said justifies the 12-month timeline. He said the agreement was designed to prevent a purchaser from turning around and selling the property to another entity.
“It’s not because it is going to take us 12 months to secure financing,” DiSanto said. “The reason for the 12-month request is because we have to fulfill all those other requirements requested by the city.”
He said he hates using the pandemic as an excuse, but he does not know how long it will take to secure the private equity financing.
“If Tim and I do not secure financing by March, or are close to securing financing, we can come back and ask for an extension with some type of letter from the lender, and then move forward,” DiSanto said. “If you go to a local bank, right now, as a commercial borrower, there’s three types of loans that they will give out: self-storage, multi-family and student housing. Everything else is nixed, so you have to go to a private (equity) firm.”
He said the delay of two years by the previous administration resulted in $2 million in additional project cost, and the only the only positive result of the delay has been the decrease in interest rates.
“If we didn’t believe in the project, I wouldn’t be standing here tonight,” DiSanto said. “The demand for the product is there. The demand is huge within the city of Wyandotte. You could build four or five of these units, to be honest with you.”