INVESTMENTS IN ST. LOUIS - aflcio-hit.com · INVESTMENTS IN ST. LOUIS BUILDING THE COMMUNITY. HIT IMPACTS IN ... model based on HIT project data and secondary source material

AFL-CIO HOUSING INVESTMENT TRUST

SPRING 2016

INVESTMENTS IN

ST. LOUISBUILDING THE COMMUNITY

HIT IMPACTS IN ST. LOUIS(1987-2015)

27 projects

$546 million HIT investment

$900 million total development investment

14,405 total jobs

6,530 union construction jobs

4,660 housing units

1,589 affordable units

$1.95 billion in total economic impact

$823 million in wages and benefits for workers including $392 million for union construction workers

$65 million in revenue for local and state governments, $179 million for federal governments

Source: Pinnacle Economics, Inc. and HIT. Figures provided by Pinnacle are estimates calculated using an IMPLAN input-output model based on HIT project data and secondary source material. 2014 dollars.

The AFL-CIO Housing Investment

Trust (HIT) has committed to invest in

the St. Louis area over many economic

cycles for almost three decades.

The HIT has invested $546 million in the St. Louis area over

nearly 30 years to leverage close to $900 million, creating

6,530 union construction jobs and 7,875 jobs across other

industries, building and preserving approximately 4,660 housing

and healthcare units. Not only are HIT-financed projects in

St. Louis important to the community, but they are important to

all of the HIT’s investors, representing 8% of the total

HIT commitments since 1987.

AFL-CIO HOUSING INVESTMENT TRUST • ST. LOUIS INVESTMENT REPORT 1

“Construction workers in the St. Louis greater metro area have been devastated by high unemployment. By investing in these projects, the HIT is creating good union jobs that are putting our members back to work. These HIT projects are a great investment for our members’ pension funds.”

Jeff AboussieExecutive Secretary-Treasurer, St. Louis Building and Construction Trades Council

2 AFL-CIO HOUSING INVESTMENT TRUST • ST. LOUIS INVESTMENT REPORT

HIT’s Commitment to St. LouisThe HIT is committed to investing in the St. Louis area to create jobs and affordable housing throughout economic cycles as shown by the $546 million of capital it has invested in 27 projects in the area since 1987. These investments have led to significant positive impacts for residents of the community. The HIT has:

● invested a total of $546 million in 27 projects in the St. Louis area, including Shrewsbury, Jennings and Richmond Heights, Missouri, and Swansea and O’Fallon, Illinois

● leveraged total development investment of nearly $900 million ● created an estimated 14,405 jobs across industries, including 6,530 union construction jobs ● generated an estimated total economic benefit of $1.95 billion.

The HIT launched its Construction Jobs Initiative in 2009 to spur construction employment across the U.S. In the St. Louis area, the HIT has invested $227 million in eight projects to date during the initiative, including two projects that were part of the largest revitalization effort in downtown St. Louis in 30 years.

St. Louis Area Projects Financed by the HIT (1987-2015)

Period Number of Projects Total Units Affordable

UnitsHIT

Investment

Total Development Investment

Union Construction

JobsOther Jobs

1987-2007 19 3,012 1,126 $318,633,921 $465,654,504 3,526 4,291

Construction Jobs

Initiative (2009-2015)

8 1,648 463 $227,072,300 $432,702,845 3,004 3,584

Total 27 4,660 1,589 $545,706,221 $898,357,349 6,530 7,875

HIT INVESTMENTS IN ST. LOUISBUILDING THE COMMUNITY


Economic and Fiscal Impacts of HIT’s Construction-Related Activity on the St. Louis Area Economy (1987-2016)

1,2 Source: Pinnacle Economics and the HIT. Figures provided by Pinnacle are estimated calculated using an IMPLAN input-output model based on HIT project

data and secondary source material. In 2015 dollars.

Significant economic and fiscal impacts on the St. Louis area’s economy have resulted from the construction of 27 HIT-financed projects, in which the HIT has invested over $546 million.

Total economic activity generated across industries is estimated at $1.95 billion.1 Some 6,530 union construction jobs and a total of 14,405 jobs have been created in various industries. In addition, these projects have served as economic catalysts for additional development in the area.

The creation of construction jobs through financing of union-built projects is an important collateral benefit of the HIT’s investments. The economic benefits do not end with the on-site employment, but continue to ripple through the local economy as the project moves through permitting and construction. The HIT’s investments leverage additional spending for construction, which provides wages and benefits for union construction workers and others such as architects and engineers.

Businesses directly impacted by the spending buy goods and services from other businesses, which in turn generate additional sales, jobs, and income for others. In addition, increased purchasing power for families directly and indirectly

impacted by the construction lead to still more spending on goods and services, impacting other sectors of the economy.

The total estimated economic and fiscal impacts on the St. Louis area’s economy are listed below.2

● $1.95 billion in total economic benefit ● 27 projects ● $823 million in personal income, including wages

and benefits, with $392 million of that amount earned by union construction workers.

● 14,405 total jobs across industries, 27.9 million hours of work

● 6,530 union construction jobs, 13.1 million hours of work

● $65 million in state and local tax revenue generated 4,660 housing units constructed or rehabilitated, including 1,589 affordable to low-and moderate income families

The 27 projects include 25 projects in St. Louis, Shrewsbury, Jennings and Richmond Heights, Missouri, and two projects in Swansea and O’Fallon, Illinois.

“This job means a lot to me and my union brothers, and it’s very supportive of my family, also. Without it going, I know that there would be a lot of people out of work, so I am very excited that this job has finally kicked off.”

Chris FlemmingLaborers, Local 42


“Some of the largest projects in downtown St. Louis, The Laurel and Park Pacific, debuted thanks to a $108 million investment by the HIT. It plowed pension funds back into our community to advance economic development at a time when credit was extremely tight.”

Jim LaMantiaExecutive Director, St. Louis Construction Cooperative Board (then PRIDE)

“This job means a lot to me and my union brothers, and it’s very supportive of my family, also. Without it going, I know that there would be a lot of people out of work, so I am very excited that this job has finally kicked off.”

Chris FlemmingLaborers, Local 42

5AFL-CIO HOUSING INVESTMENT TRUST • ST. LOUIS INVESTMENT REPORT

Recent HIT-Financed Projects in the St. Louis Area The HIT committed to generating union construction jobs to build housing in the St. Louis area when construction jobs were needed most. Since 2009, the HIT has invested $227 million in eight projects. The HIT launched the Construction Jobs Initiative in response to high unemployment in the building trades when the construction unemployment rate at 21% was 12 percentage points above the national rate.3 Please see Appendix A for a list of the projects.

The total estimated economic and fiscal impacts on the St. Louis area’s economy of these eight Construction Jobs Initiative projects are listed below.4

● $881 million in total economic benefit ● $396 million in personal income, including wages

and benefits ● 6,590 total jobs across industries, 12.7 million hours

of work ● 3,000 union construction jobs, 6.0 million hours of

work ● $32 million in state and local tax revenue generated ● 1,648 housing units constructed or rehabilitated,

including 463 affordable to low-and moderate income families

ConclusionThe HIT has invested over $546 million in the St. Louis area financing 4,660 units of housing and generating nearly $900 million of development over nearly 30 years, with $227 million invested since 2009. The HIT remains committed to the area and continues to seek additional investment opportunities in order to help increase the supply of affordable housing and foster redevelopment while creating union construction jobs.

3 Bureau of Labor Statistics

4 Source: Pinnacle Economics and the HIT. Figures provided by Pinnacle are estimated calculated using an IMPLAN input-output model based on HIT project

data and secondary source material. In 2015 dollars.

“We appreciate what the AFL-CIO Housing Investment Trust has done to finance projects in St. Louis. These projects have had a big impact on our economy, creating good jobs for union workers and well-built housing for residents.”

Pat WhitePresident, Greater St. Louis Labor Council, AFL-CIO

Construction underway at Heights at Manhasset project


PROJECT PROFILESA number of the projects that the HIT has helped finance in the St. Louis Area in recent years are shown on the following pages.


Overview ● The HIT is investing $41.6 million, the HIT to

help finance this $54 million apartment complex, under construction in in Richmond Heights in St. Louis County.

● 281 market-rate units. ● Expected to create an estimated 265 union

construction jobs.

Project DescriptionThe Heights at Manhassett is a $54 million development with 281 market-rate apartments in Richmond Heights, MO. This four-story building will have a distinctive silhouette, with wide windows and porches, and alternatingly deep and shallow overhangs. Residents will have access to indoor and outdoor parking, as well as a courtyard, swimming pool. The property is located in St. Louis County at the center of one of the most job-rich areas in the region, with excellent access to the larger region via proximity to two interstate highways. The project will be the first of four development phases.

THE HEIGHTS AT MANHASSETT Richmond Heights, MO


HIT RoleThe HIT is providing $42 million in financing for The Heights at Manhassett through the purchase of Ginnie Mae construction and permanent loan certificates. The HIT worked closely with mortgage lender, PR Mortgage and Investment Corporation, and the developer, MV One LLC, to structure financing for the project.

Social ImpactThe project is contributing to St. Louis’ effort to develop neighborhoods in suburbs surrounding the city by providing access to housing that is attractive to many young professionals. The property is well-situated with easy access to many employment, shopping and entertainment amenities.

“Investing with HIT has been a great partnership. Our Pension dollars help fund deals that refuel local economy and deliver competitive returns.”

Frank JacobsBusiness Manager, IBEW Local #1


Overview ● $98 million redevelopment of the former Missouri

Pacific/Union Pacific headquarters building into a mixed-use development.

● HIT purchase of a $63.1 million FHA-insured construction/permanent mortgage loan securitized with a Ginnie Mae mortgage-backed security.

● 230 market-rate residential units, 31,000 square feet of retail space, and 88,000 square feet of office space.

● Integral part of the largest downtown revitalization drive in St. Louis in 30 years.

● Over 750 union construction jobs created.

Project DescriptionThe $98 million Park Pacific project is the redevelopment of the former Missouri Pacific/Union Pacific headquarters building in St. Louis into a mixed-use development featuring 230 market-rate residential units, 31,000 square feet of retail space, and 88,000 square feet of office space, along with a new seven-story parking facility. Community rooms and recreational facilities were also developed. The building’s location in the city’s Downtown West neighborhood on the edge of the Central Business District makes it a prime redevelopment site.

PARK PACIFIC APARTMENTSSt. Louis, MO


HIT RoleThe HIT provided financing through a $63 million FHA-insured construction and permanent mortgage loan securitized with a Ginnie Mae mortgage-backed security. The HIT financing package was made more economical for the developer by including a split interest rate, with different interest rates for the construction period and the permanent financing.

Social ImpactPark Pacific is an integral part of the largest downtown revitalization drive in St. Louis in 30 years. The rehabilitation of this historic landmark is helping preserve an important part of St. Louis’s past while providing 230 new units to help meet the demand for in-town housing. The HIT’s investments in Park Pacific and another downtown development project, The Laurel, are part of over $500 million of construction on six major reconstruction projects in St. Louis.

Work on the Park Pacific project generated over 750 family-supporting construction jobs for local union members.

“ This job has really helped and it’s put a lot of our plumbers back to work, who have been out of work a long time.”

Steve Sullivan, Plumbers and Pipefitters, Local 562


Overview ● With a $45 million investment, the HIT helped

finance the residential portion of this $175 million historical building conversion.

● 205 market-rate rental housing units. ● Part of the largest revitalization effort in St. Louis

in 30 years. ● Entire project created over 1,340 union

construction jobs.

Project DescriptionThe Laurel project was the $175 million conversion of a historic building in downtown St. Louis into a new mixed-use facility that serves as a cornerstone for the city’s downtown redevelopment efforts. The project involved the substantial rehabilitation of the vacant Dillard’s department store located on Washington Avenue in the central business district. The HIT provided $45 million in financing for the project’s residential component, which featured the conversion of 60% of the building into 205 units of rental housing. The residential area includes ground floor retail space, interior parking spaces, and an interior atrium.

THE LAURELSt. Louis, MO


“This job means a lot. I live in the city myself, so seeing money dropped in this area means a lot to me and the rest of my guys who work for me. We’re very thankful.”

Steve GiltnerSprinkler Fitters, Local 268

HIT RoleThe HIT provided financing for The Laurel through a $45 million FHA-insured construction and permanent mortgage loan securitized with a Ginnie Mae mortgage-backed security. By including a split interest rate, with different rates for the construction period and the permanent financing, the HIT financing package was more economical for the developer.

Social ImpactThe Laurel project was part of the largest revitalization effort in St. Louis in 30 years. Adjacent to The Laurel is the redeveloped One City Center, while major sports and entertainment venues are nearby, including the Scottrade Center, and Busch Stadium, home of the Cardinals. The Laurel provides 205 new units of in-town housing, while also helping preserve an historic structure on Washington Avenue, one of the city’s main downtown corridors. The HIT’s investments in The Laurel and another downtown development project, the Park Pacific, are part of more than $500 million of construction on six major reconstruction projects in St. Louis. Work on The Laurel generated more than 1,340 family-supporting jobs for members of the local building and construction trades unions.


ADDITIONAL PROJECTS

HOLY INFANT AND ST. JOSEPH APARTMENTS Shrewsbury, MO

● $13 million rehabilitation and preservation of affordability at two developments for low-income seniors.

● HIT purchase of $6.6 million tax-exempt bonds issued by the Industrial Development Authority for St. Louis County and backed by Ginnie Mae securities.

● Keeping the 157 housing units affordable for low-income seniors for an additional 20 years.

● Created approximately 90 union construction jobs.

ST. JOHN NEUMANNJennings, MO

● The HIT is providing $5.1 million of the $8 million total development investment for new construction, rehabilitation and refinancing at this senior housing complex.

● All 100 units will be affordable. ● The work is expected to create 40 jobs for members

of the building and construction trades.


PARKWAY LAKESIDE APARTMENTSO’Fallon, IL

● $28 million construction of 21 two-story garden-style apartment buildings around a man-made lake.

● $26.1 million of HIT financing through FHA-insured construction/ permanent loan purchased as a Ginnie Mae mortgage-backed securities.

● 232 market-rate units. ● Created approximately 150 union construction jobs.

VILLAS OF CRYSTAL LAKESwansea, IL

● $26 million construction of a new apartment complex.

● $23.7 million HIT purchase of Ginnie Mae mortgage-backed securities.

● 216 market-rate units. ● Provided 140 jobs to members of the St. Louis

building and construction trades.

COUNCIL TOWER SENIOR APARTMENTSSt. Louis, MO

● $30 million substantial rehabilitation of an aging multifamily residential building in Midtown St. Louis.

● $15.9 million in HIT financing through purchase of tax-exempt bonds backed by Ginnie Mae securities.

● 227 apartments, including 206 units designated as affordable.

● Generated some 230 union construction jobs for local building and construction trades union members.


The AFL-CIO Housing Investment Trust (HIT) is a $5.8 billion fixed-income mutual fund that specializes in high credit quality multifamily mortgage-backed securities. The HIT has a 30-plus-year history of generating competitive returns for pension funds and labor organizations while also providing the vital collateral benefits of union construction jobs and affordable housing for working people. One hundred percent of on-site construction work financed by the HIT is done with union labor.

Since its inception in 1984, the HIT5 has:

● invested over $7 billion (over $10 billion in current dollars) in 460 projects in 29 states,

● created over 76,000 union construction jobs, or over 150 million hours of work and more than 86,000 other jobs across industries in local communities around the country,

● generated total economic impact estimated at more than $25 billion,

● produced personal income, including salaries and benefits, of nearly $10 billion, including an estimated $5 billion for union construction workers,6 and

● created over 101,000 housing units, with 65% affordable to low- and moderate- income families.

ABOUT THE HIT

“ HIT’s commitment to St. Louis projects brings much needed jobs, housing and development to local economy.”

Gregg SmithBusiness Manager, Painters District Council 58

5 Together with its wholly owned subsidiary Building America CDE, Inc., which has provided $85 million in New Markets Tax Credits to 11 projects across the U.S.

6 Source: Pinnacle Economics, Inc. and HIT. Figures provided by Pinnacle are estimates calculated using an IMPLAN input-output model based on HIT project

data and secondary source material. 2015 dollars.


APPENDICES


Appendix A

Recent HIT-Financed Projects during the Construction Jobs Initiative (2009-present)

Year Project City Total Units

Afford. Units

HIT Investment

Total Development Investment

Construction Jobs

2009 Villas at Crystal Lake Swansea, IL 216 $23,736,300 $26,373,746 140

2010 Parkway Lakeside Apartments O’Fallon, IL 232 $26,094,000 $28,160,111 147

2010 Council Tower Senior Apartments St. Louis, MO 227 206 $15,862,000 $29,735,645 228

2010 Park Pacific Apartments St. Louis, MO 230 $63,131,600 $98,318,292 753

2010 The Laurel St. Louis, MO 205 $44,952,400 $175,000,000 1,341

2012 Holy Infant & St. Joseph Apartments

Shrewsbury, MO 157 157 $6,600,000 $13,000,000 91

2015 St. John Neumann Apartments Jennings, MO 100 100 $5,066,000 $7,983,263 40

2015 The Heights at Manhassett

Richmond Heights, MO 281 $41,630,000 $54,131,788 264

Total 1,648 463 $227,072,300 $432,702,845 3,004


St. Louis Economic and Fiscal Impacts

Table 1: St. Louis Projects Economic Impacts, by Type (2015 dollars)

Type of Spending Output Labor Income Jobs Hours Worked

Direct - Hard Cost $908,114,000 $391,685,000 6,530 13,124,100

Direct - Soft Cost $76,451,000 $46,111,000 639 1,171,000

Indirect $478,699,000 $199,828,000 3,472 6,535,000

Induced $484,883,000 $184,966,000 3,764 7,020,700

Total $1,948,147,000 $822,590,000 14,405 27,850,800

Table 2: Total City of St. Louis Projects Economic Impacts, by Major Industry Sector (2015 dollars)

Major Industry Sector Output Labor Income Jobs Hours Worked

Agriculture $4,602,000 $1,759,000 44 78,600

Construction $918,892,000 $396,185,000 6,596 13,257,200

Government $19,671,000 $13,484,000 304 516,900

Manufacturing $115,526,000 $24,446,000 315 642,200

Mining $8,059,000 $3,665,000 48 99,000

Service $646,353,000 $276,422,000 4,781 8,967,600

TIPU $55,643,000 $18,576,000 327 653,400

Trade $179,400,000 $88,053,000 1,991 3,635,900

Total All Industry Sectors $1,948,146,000 $822,590,000 14,405 27,850,800

Note: TIPU stands for transportation, information and public utilities.

Appendix B


Table 3: St. Louis Projects Trade Impacts

Trade Jobs Hours Worked

Asbestos and insulation 85 170,600

Boilermakers 65 131,200

Bricklayers (including tile setters) 444 892,400

Carpenters 1,182 2,375,500

Cement Masons 248 498,700

Electrical Workers 980 1,968,600

Elevator Constructors 33 65,600

Ironworkers 196 393,700

Laborers 816 1,640,500

Operating Engineers 229 459,300

Other 490 984,400

Painters 522 1,049,900

Plumbers 718 1,443,700

Roofers 222 446,300

Sheet Metal Workers 202 406,800

Teamsters 98 196,900

Total All Trades 6,530 13,124,100

Table 4: St. Louis Projects Fiscal Impacts, by Major Expenditure Category (2015 dollars)

Type of Spending State and Local Taxes and Fees

Federal Taxes and Fees

Direct - Hard Cost $13,473,000 $85,013,000

Direct - Soft Cost $1,649,000 $5,519,000

Indirect $22,353,000 $56,624,000

Induced $27,735,000 $31,693,000

Total $65,210,000 $178,849,000

Source: Pinnacle Economics, Inc.


COMMUNITY PARTNERSBalke Brown Associates

Bricklayers’ Local No. 1 of Missouri Pension Fund

Bruce Development Company

Building and Construction Trades Council of St. Louis

Cardinal Ritter Senior Services

Ceramic, Tile & Marble Mason Union, Local 18 Pension Fund

City of St. Louis Mayor’s Office

Construction Laborers Pension Trust of Greater St Louis

DFC Group, Inc.

Draper & Kramer, Inc.

International Brotherhoods of Electrical Workers, Local 1 Pension Plans

Gershman Investment Corp.

Glaziers, Architectural Metal & Glassworkers #513 Benefit Funds

The Industrial Redevelopment Authority for the City of St. Louis, Missouri

International Union of Elevator Constructors, Local #3 Pension Funds

Iron Workers St Louis District Council Benefit Trust Funds

Lancaster Pollard Mortgage Company

Lawrence Group

McKnight Place Partnership

Missouri Housing Development Corporation

ND Consulting Group

Owen Development

Painting Decorating Foundation

Plumbers’ & Pipefitters’ Local 562 Pension Fund

PNC Bank

P/R Mortgage & Investment Corp.

St. Louis Development Corporation

The St. Louis Housing Authority

St. Louis Painters Benefit Funds

Stifel, Nicolaus & Company, Inc.

Teamsters Negotiated Pension Plan

Tile Finishers Local Number 18 Pension Fund

UNITE/HERE Local 74 Pension Fund

AFL-CIO HOUSING INVESTMENT TRUST2401 Pennsylvania Avenue, NW, Suite 200, Washington, DC 20037

Phone (202) 331-8055 Fax (202) 331-8190www.aflcio-hit.com

Paul SommersMidwest Regional Marketing Director

937-604-9681

Spring 2016

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INVESTMENTS IN ST. LOUIS - aflcio-hit.com · INVESTMENTS IN ST. LOUIS BUILDING THE COMMUNITY. HIT IMPACTS IN ... model based on HIT project data and secondary source material