New Cincinnati developers plan both affordable housing, higher-end project
Business Courier of Cincinnati - by Lucy May Senior Staff Reporter
A recently transplanted development firm has plans to both create affordable housing in urban Cincinnati and finance a $900 million project on Northern Kentucky's riverfront.
C&M Communities opened offices on the third floor of Emmanuel Community Center in Over-the-Rhine earlier this year and has been quietly sizing up the market and lining up investors. But now C&M CEO Terry Chan and his brother, Gary, are poised to unveil their vision, and it's a big one.
They want to redevelop both low-income and market-rate housing and help the people who rent it become financially self-sufficient through credit counseling, a savings program and even job training.
At the same time, C&M has teamed up with local developer Dave Imboden on his DCI Properties' Manhattan Harbour project in Dayton, Ky. The $900 million waterfront project sits on 142 acres and could include as many as 2,000 homes and 230,000 square feet of retail and a hotel. The plan also calls for assisted living, walking trails, a park and a ferry shuttle between the site and downtown
Winning over DCI chief
"It's all part of C&M's drive to help create communities," said Terry Chan, a former finance executive at General Electric who left GE to lead the development venture.
"The driver behind everything we're doing is community, not so much real estate," he said. "We'd like to do something where we are building up the people in Cincinnati, as well, so everyone wins."
That vision and passion won over Imboden. C&M has bought out DCI Properties, which will no longer exist. Imboden will be a small equity partner in Manhattan Harbour and is going to work for the brothers to help develop the project.
"I've been telling people I'm going to have to find some out-of-town investors, someone who thinks outside the box, to do Manhattan Harbour," Imboden said. "These guys, they are my angels from heaven."
Already, C&M is lining up additional investors for the Manhattan Harbour project and plans to start construction in the second quarter of 2009, Chan said.
Michael Rhee, president of Alpine Wealth Management Group in New Jersey, said he expects to help finance tens of millions of dollars on the riverfront project. Rhee said he has had interest from investors in New York and New Jersey as well as from overseas.
"The timing is perfect," Rhee said. "As the real estate market comes out of the credit crunch, when their project is completed in three to five years, we believe the market will have recovered to the point where they should be in a great position to reap the benefits."
Rhee also is helping line up investors for the community development projects. His firm specializes in conscientious investing, he said, and there are many individuals and institutions looking for projects that can generate a return and make a difference.
"We like to focus on projects that actually give back to the community, where we can grow organically in the community, instead of hit-and-run investment types," he said.
Chan hopes that idea of giving back will attract local investors to the community development projects, too.
Helping people buy homes
Imboden plans to invest in the affordable housing side of the business. C&M wants to rehab a few houses and apartment buildings at a time, finding tenants who want to improve their financial circumstances. It has a lease-to-own strategy to help match money tenants put in savings, helping them save for a down payment to buy the homes.
Chan said that under the model, an investor who purchases a $70,000 house could earn enough from rent payments to cover the mortgage and then sell the home to the renter for $80,000 in roughly two years.
"That's a better return than the market these days," he said.
Nate and Smaranda Lawrie are sold. The Bengals tight end and his wife like the idea of helping out and earning a bit at the same time, Lawrie said. "The fans in Cincinnati are amazing. They support us in a season like this," he said. "It's a way for us to kind of give back."
Lawrie said he's talking with other players about investing, too. And Chan has other local and out-of-town investors in the mix.
While C&M hasn't developed much locally yet, expectations are high.
"They've really immersed themselves in the community much more than a lot of other developers that I've seen," said Michael Cervay, Cincinnati's director of community development and planning.
Cervay drove the Chan brothers around the city over the summer. He was impressed by their passion and the fact that their late father, Dominic Chan, had development experience in the Pacific Northwest through his Trinity Development Venture LLC.
"They kind of grew up in this business," Cervay said. "It would appear that they have what it would take."
Neither Terry Chan, 27, nor Gary Chan, 26, has a lot of direct development experience. But they are surrounding themselves with people like Imboden and Charles Nyame, a Cincinnati native and fellow Carnegie Mellon University alumni who has renovated and leased 10 single-family homes.
Nyame's experience here and their own study of the market convinced the Chans that Cincinnati was the place for C&M to make its mark. "There's a diverse economic base here, it's relatively stable, and rentals are very strong here. You actually get cash flow, not like on the coasts," Chan said. "Cincinnati feels like the hub for the Midwest."
lmay@bizjournals.com | (513) 337-9437