Tom Wright, AIA, on how Tim Sittema of Crosland Southeast is making a difference.
Several weeks ago, Steve Goggans and I met with Tim Sittema of Crosland Southeast to learn how his perspective has changed since an earlier conversation with him in 2018. At that time, Tim and his partners were leading a successful commercial real estate development firm and they were considering jumping into the development of affordable housing. As our firm had been designing low income housing tax credit (LIHTC) financed housing for more than a dozen years, Tim was seeking advice on how best to proceed. He shared with me his new vision and why he was inspired to explore how he might make a difference. Two major events had called him to a new awareness.
In 2014, Harvard University and UC Berkeley published a study that ranked the largest 50 US cities on economic mobility (how likely could a child born in poverty move out into main stream society). Charlotte ranked last, 50 out of 50: “deeply divided by race, quality of education, poverty and economic opportunity, level of social capital, and broken families”.
In September 2016, Keith Lamar Scott, an African American, was shot and killed by Charlotte-Mecklenburg Police. Two days later a riot broke out in Center City (Uptown) Charlotte, requiring the North Carolina governor to call in the national guard to restore order and peace to the city.
Like many Charlotteans, Tim Sittema could not believe that his progressive, growing “top 10 city to live in America” (according to Forbes) would ever be characterized by the ramification of these two events. As an experienced real estate developer, Tim felt compelled to act and to find a way to use his talents and skills to help address and improve his community’s pressing need for social justice. He and a group of other influential men (also impacted by a new awareness) began to meet to learn more about the issues with the focus on action: “Let’s do something, not just talk about it.”
In 2015, the Opportunity Task Force was formed to study intergenerational poverty in Mecklenburg County. On March 27, 2017, the task force reported that the major issues were affordable housing, jobs & employment, healthcare, and equity in education. During this time, Tim and his partners discovered how other communities were responding comprehensively to very similar issues. The most intriguing was the East Lake community in Atlanta which had become the model for community comprehensive redevelopment known as a Purpose-Built community. As a result, the group formed a new charity called Freedom Communities that is using the Purpose-Built framework to support upward mobility for residents along the Freedom Drive corridor of west Charlotte. (Locally, Dionne Nelson of Laurel Street Residential responded with a similar comprehensive development, Renaissance West, with multigenerational low-income housing, afterschool care and a community charter elementary school.)
Since our 2018 conversation, Tim has also started CSE Communities as Crosland Southeast’s affordable housing development arm, led by John Butler and Paul Baalman. Since that time, they have successfully started construction on two LIHTC mixed income apartment communities with several more in the development process. Most recently, Crosland Southeast was able to use its development expertise to orchestrate a complex arrangement of partnerships to start the construction of a Westerly Hills apartment community. With both land and construction costs rising, the feasibility and viability of an affordable community has been increasingly difficult to achieve. Without significant financial subsidies, new apartments are too expensive for low-income families. The cost is now so high that, according to William J. Bates, 2019 AIA President, “It’s not uncommon for developers to rely on upward to 20 (public & private) financing sources to fill the gap between the money needed to build and what the lenders and investors can provide.”
The Crosland Southeast team pulled together various strategic and financial partnerships to make this new Westerly Hills apartment community a reality.
- CSE Communities partnered with Horizon Development Partners (a subsidiary of INLIVIAN, formally the Charlotte Housing Authority) and Freedom Communities as co-developers.
- The North Carolina Housing Finance Agency (NCH FA) approved a LIHTC allocation for the development. As a LIHTC development, the units will be rent restricted for 30years to be affordable (i.e., rents are <30% of resident income) for families making 30% to 80% of Area Median Income (AMI).
- Barings provided a first mortgage at a 2% discount to market interest rates. This was part of a commitment from several Charlotte financial institutions (Barings, Bank of America, Truist, and others) to support affordable housing by offering below market-rate loans.
- The Charlotte Housing Opportunity Investment Fund (CHOIF) provided a $2.9M second mortgage at 2%. CHOIF is an approximately $SOM fund raised by the private sector to support affordable housing and is managed by the Local Initiatives Support Corporation (LISC).
- The City of Charlotte provided a $2M third mortgage from its Housing Trust Fund.
- Pinnacle Bank provided the construction and bridge loans and is the LI HTC investor.
- Freedom Communities will also provide wrap-around support services for the tenants.
Over the past 4 months, a half dozen cities have endured continuous riots and dealt with protests over the deaths of multiple African Americans in incidents with police. Fortunately, Charlotte remains relatively calm with peaceful demonstrations. The alarm bell of the 2014 Harvard report awakened the Charlotte community, and many in leadership were called to action. My hope is that today the city is showing tangible proof (not rhetoric) that basic needs and concerns are being addressed. That affordable housing is being built is tangible evidence that there is new hope for many. Without basic housing and shelter, all societies are subject to anger and frustration. Today city, county, and state leaders are working in partnership with private lenders and developers such as Horizon Development, Laurel Street Residential, the Housing Partnership, and now, Crosland Southeast to build trust and make a difference in our community.
Epilogue: Now, in 2020, Tim Sittema and his partners are delivering on their promises and commitment to the Freedom Drive revitalization in West Charlotte. Their success has led his group to seek new opportunities in East Charlotte to partner with the City of Charlotte in the Envisioning of Eastland Mall area redevelopment. The hope is to create a new, culturally diverse community that can be the heart and soul of the city’s eastside. Hope begets hope of a better world uniting for the greater good.
About Tom
Tom, North Carolina Managing Partner of the firm, started practicing architecture in 1975 and since then, has become well known in the community as both a developer and an architect. He strives to embody the principles of Considerate Design. Tom not only designs incredible structures but is genuinely interested in others and in forming relationships.
