Investment partners from Aurora who lead Fox Valley Developers have arranged about $82 million in public and private financing to redevelop an old hospital in the community, Commercial Observer (CO) reports. The project has an overall estimated $190 million value, including $108 million in developers’ equity.
The Old Copley Hospital had been designated as a historical landmark earlier in the year. The hospital is on a nine-acre campus at 506-532 South Lincoln Ave. in the western Chicagloland suburb.
Konrad Construction from Johnsburg will be the project’s general contractor, the published report says. It will include 96 independent, assisted-living and memory-care senior living units, along with an independent apartment community of 53 units to house tenants with cognitive and/or developmental disabilities. =There will also be some 86,000 sq. ft. of medical office space (housing administrative offices, an urgent care clinic and a pharmacy) and park space.
CO says Enhanced Capital provided a bridge loan to cover nearly $32 million in state and federal historic tax credits as well as $3 million in Commercial Property-Assessed Clean Energy (C-PACE) financing. As well, East West Bank “was brought in to partner with the developer as a historic tax credit investor, thereby reducing its tax liability via discounts provided by the program,” the publication reports.
In addition, there is $34.5 million in first morgtage debt from a Boston-based debt fund and the developers also received about $12 million in funds from the City of Aurora, of which the City Council unanimously approved the development in November 2019, CO reported.
Aurora mayor Richard Irvin was quoted in Nov. 2019 by The Aurora Beacon News as saying the investment is the largest in the area “in generations, maybe the largest ever.”
D2 Capital Advisors vice-president Jack Cortese said in a statement about the arrangement of the deal that his group had to overcome the hurdles of “sourcing a lender that would not only consent to C-PACE (financing), but also had experience with tax credits.”
CO quoted Cortese as saying that while his organization’s team was able to assemble lending sources, there were added challenges around “getting them comfortable with senior living products amid the pandemic and educating them on the independent apartment community.”
The hospital originally built in the late 1800s, evolved until it was closed in 1995 to be replaced by the Rush Copley Medical Center.
Fox Valley purchased the site two years ago with plans to revitalize it.
CO reported: “In February, the Old Copley Hospital was officially added to the National Register of Historic Places, as it was the first ‘purposefully-built city hospital’ in the country when it opened in 1888; it didn’t offer just standard patient care, but also maternity and surgical care, MacRostie Historic Advisors’ Rachel Barnhart, who wrote the nomination for the site’s inclusion on the National Register, told Northern Public Radio in February.”