Developers of the Mason Village project released profit figures Thursday (two days after they were requested) and over the first 15 years of the project's life, they said it will make $920,000.
That figure stands after rental rates rise over that first 15-year period from a total of $561,972 in year one to $741,510 in year 15. Subtract expenses to operate the 77-unit apartment complex, make debt payments of $157,057 each year for 15 years, and the project partners are left with $920,000 at the end of 15 years, according to documents sent Thursday from developer John Stanley Inc.
Those profits appear to be split down the middle with the Mason Housing Partner LP (comprised of John Stanley and the Church of God in Christ) and the city of Memphis.
City taxpayers are loaning $4 million to a church to build apartments but the developer said “we don’t know” how much money his company will make on the project.
A news conference Tuesday acknowledged that the Memphis City Council recently appropriated the $4 million loan to the Church of God in Christ (COGIC) and its development partner John Stanley Inc. to build the $10 million Mason Village apartment complex.
The project will bring 77 rental town homes to the six-acre site across the street from Mason Temple, the iconic South Memphis church where Martin Luther King Jr. delivered his “Moutnaintop” speech in 1968. The project was touted Tuesday by church and city leaders as an answer to the city’s ongoing problem of the lack of affordable housing.
The town homes will be reserved for families who earn less than 60 percent of the area’s median income, which is about $47,000. Rents at Mason Village are slated to be $595 a month for a two-bedroom unit and $685 for a three-bedroom unit, according to Saki Middleton, president of the developer John Stanley Inc.
But Middleton said he was unclear about how much his company would make from the deal, one he said he’d been working on for seven years. He said he had sent in a business plan to the Memphis Division of Housing and Community Development (HCD) when asking for the loan and that the application had contained projected revenues.
But Middleton said he couldn’t remember the figures when a reporter asked him Tuesday, “how much money will your company make on this deal?”
“Ah, we don’t know,” Middleton said. “I mean, it’s still up in the air because I think we’re going to have to contribute some of our profit to make the project work. So, we’re…we don’t even know.”
HCD president Paul Young said the company did project profits in its loan application but could not remember the figure. A copy of the HCD application has been requested.
Mason Village will contain 58 two-bedroom units and 18 three-bedroom units in 30 separate buildings. The rentals will sit in a campus to feature a community room, multiple lounges, a media room, computer room, a “tot lot” (which is supposed to be an area for children), outdoor picnic area, and a centralized laundry room. All of it was designed by Memphis-based Self+Tucker Architects.
COGIC Bishop Charles E. Blake Sr. said the Mason Village project is “another critical phase of ongoing vision of the church” and showed the church is “truly committed to the city of Memphis.”
Memphis Mayor Jim Strickland said the project will aid in the city’s “critical need for affordable housing,” noting that over the last six months 700 low-income families in Memphis have had to move from existing residences and have had trouble finding new places to live.
“I’m thrilled about where this development will take place,” Strickland said. “This is a very important place in the spiritual life of the city, right in the shadow of Mason Temple and right in the middle of South Memphis. This (development) confirms our collective commitment to this area of the city.”
Construction is set to begin on the project in March 2016 and be complete in March 2018.
This story will be updated with those projected revenue figures from John Stanley Inc. as soon as they are provided.