Cleveland, OH 44114
Rainbow Terrace had been all but abandoned, resulting in a run-down complex besieged by gangs and drug-related crime. HUD took control of the property and after an RFP process, the City of Cleveland selected Vesta to redevelop it.
Vesta and the City of Cleveland were adamant about changing the character of the property and offering quality of life initiatives for residents. Vesta developed a plan and assembled the financing from various sources.
A major modification was the demolition of 58 Apartments, replaced with an equal number of new apartments on an adjacent site donated by the City.
Renovations of the remaining buildings included new pitched roofs, windows, heating and cooling systems, and updated unit finishes including new cabinets, carpets, flooring, appliances, and plumbing fixtures. Improvements to façade and landscaping improved the property’s curb appeal. Hard construction costs exceeded $30 million.
Financing sources included: a $14.8 million FHA-insured first mortgage funded by tax-exempt bonds; $11.7 million of HUD grant funds; a $5 million construction loan from the City of Cleveland; more than $18.3 million in equity from the sale of Low Income Housing Tax Credits; and more than $6 million of additional construction and permanent funding from various sources.
Rainbow Terrace is no longer last resort housing, but highly desirable affordable housing with a long waiting list. The resulting 484 Apartments are situated on a more spacious 28-acre site, up from the previous 18 acres. Central to the revitalized property is its quality of life amenities such as a new Community Center housing a Computer Learning Center. Every household can earn a free computer and free Internet access by completing training programs at the Center.