New Developer Puts Shovels in Ground in Indianapolis

A 2023 Emerging Developer program at the Indiana Housing & Community Development Authority (IHCDA) has hit paydirt as a 36-unit supportive housing development fostered by IHCDA funds a first-time developer who has broken ground and looks to finish construction by the middle of next year.

“It’s certainly been a journey, to say the least,” says Fred Yeakey, founder of developer 2 Thirty-Eight Properties LLC, Indianapolis (the number is an allusion to a verse in the Acts of the Apostles about revitalization).

Yeakey, a high school teacher by trade, has held several interesting jobs, including being a “barbershop mentor” for young men (dispensing advice while cutting hair) before making the turn into a multifamily housing development.

At Providence Cristo Rey High School in Indianapolis, Yeakey saw that a lack of affordable housing was hampering students who were there on internships, working one day a week with their sponsors.

“We would lose students to a lack of housing,” he says, setting him to thinking about the sector of affordable housing. However, several of the corporate partners in the internship program were developers, and one, Merchants Capital, was a lender. So, the idea for the Marvetta & Anthony Grimes Family Center for households recovering from addiction began gestating.

“That kind of got me to think what else I could do to make a difference,” says Yeakey, “and that’s where the heart of becoming an affordable developer came from.”

Merchants Capital has been a key partner in getting the Grimes Center off the ground, providing $17.1 million in financing ($9.5 million in Low Income Housing Tax Credit equity and a $7.6 million bridge loan). But the Grimes Center is a work of many hands.

They include Seeds of Hope, Volunteers of America, IHCDA and Real America LLC, a builder and developer who acts as a development consultant under the IHCDA Emerging Developer program for 2 Thirty-Eight.

The development is being built on the campus of Seeds of Hope in West Indianapolis, the nonprofit will also provide supportive services.

The Idea’s Source
Yeakey says the development originally was the idea of Marvetta Grimes, the late executive director of Seeds of Hope, which provides transitional housing for chemically dependent women.

Grimes, a graduate of Seeds of Hope herself, had to give up her children to Child Protective Services (one, Anthony, died in that program) and saw this development as a way to help mothers in the same situation. The big picture was to have housing, daycare and a health clinic all together on the Seeds of Hope campus.

Volunteers of America then entered the picture with their expertise in housing and drug rehabilitation. At the same time, Yeakey started conversations with IHCDA, which had identified a significant gap in minority developers.

“IHCDA wanted to do something to diversify the housing space in Indiana,” Yeakey says. (A second 2023 Emerging Developer award went to a company formed by Devereaux Peters, a former basketball star at Notre Dame and the Women’s National Basketball Association, who is seeking to develop housing in South Bend.)

“Seeds of Hope and Volunteers of America had an idea, but they did not have any developers interested. That’s where I came in. They asked if I would consider joining the team.”

The partners, who came together in November 2022, then targeted the highly competitive IHCDA set aside, which they were awarded in early 2023. The award included a $750,000 loan. Real America then joined the team as 2 Thirty-Eight’s required development consultant.

Although the project came together at speed, “we certainly had our hiccups along the way,” says Yeakey. “Things take time to turn over. But we have a phenomenal team.”

There will be two buildings at the Center. One will house supportive services on the first floor and 12 units of housing on the second floor. The second will have 24 units of housing. Apartment sizes are family size with two-, three- and four-bedroom units.

Cutting Hair as Well
And, remembering back to Yeakey’s time as a barber/adviser, there will be a barbershop there as well.

St. Mary’s Child Care will provide the daycare. “They specialize in pre-school,” Yeakey says.

The clinic will be manned by individual healthcare volunteers, he says, while counseling will be provided by Volunteers of America. Screening of tenants will be performed by Seeds of Hope and a referral network that includes Indianapolis-area organizations Heart Rock Recovery House, Wheeler Mission Center for Women & Children, The Salvation Army Women & Children, Dove Recovery House and Firefly Children and Family Alliance.

The design of the buildings has been thought out to provide safety, security and comfort. The hoped-for result is “a quality unit that looks like a home.”

The apartments at the Grimes Center are not designed to be permanent housing, Yeakey says, but rather transitional for a period of two to three years before stabilization allows tenants to leave looking for a better life. New cohorts would replace them.

The Center will be in West Indianapolis, 0.7 miles east of Interstate 465, in proximity to an IndyGo bus stop, restaurants, grocery stores and various retail outlets.

Yeakey’s timetable is to have one of the buildings done by June 2025 and the other by July.

And he has already started on his second deal, which involves a church in a small community outside Indianapolis.

Ben Trussell, vice president of acquisitions at Merchants Capital, details his company’s involvement with the project. Merchants Capital is the syndicator of the nine percent LIHTC award, providing $9.5 million in equity. Its parent company, Merchants Bank, provided a bridge loan for construction.

Total development cost came to $10.8 million with the tax credit equity, the $750,000 loan from IHCDA and deferred fees.

He calls the Grimes Center “an exciting and unusual project” with great partners.

What drew Merchants Capital to the Center was that it is intended for “a group that isn’t served by the run-of-the-mill LIHTC project.”

Going forward, Trussell thought Merchants Capital would be looking for further “high impact” projects.

For instance, Merchants was involved in financing the Launchpad Apartments project in Colorado, which targets at-risk youth.