A plan to invest $96 million into military housing on Fort Wainwright has fallen through.
The private company that manages the housing and its lender can’t come to terms on restructuring existing debt, which is needed to finance the new projects.
For Wainwright was among six U.S. Army bases that were announced in January to have received “lender commitment” for building new housing and improving existing housing starting this year, but that announcement appears to have been premature.
The housing on Fort Wainwright is owned by North Haven Communities, which is owned by the international real estate developer Lendlease. The lender for North Haven Communities is the Alaska Housing Finance Corp.
Lendlease had arranged financing for $1.1 billion worth of investment in housing areas at six U.S. Army bases in Kentucky, New York, Texas, Hawaii and Alaska. In an announcement in April, Alaska was removed from the list.
Phillip Carpenter is the chief operating officer for Lendlease. He said the influx of capital is being provided via Guggenheim Investments. But North Haven Communities would need to change some terms on its existing debt of $159 million with the Alaska Housing Finance Corp. to take advantage of the new financing.
“Explained simply, the existing lender agreement between AHFC and NHC includes terms that do not permit NHC to obtain new financing without certain term changes,” Carpenter said in a prepared statement. “At this time, Lendlease and AHFC have not been able to agree to those changes allowing NHC to receive separate funding from the additional private financing.”
A spokeswoman for the Alaska Housing Finance Corp. confirmed this in an emailed answer to questions but did not elaborate.
“Lendlease does have an active loan of $159 million with Alaska Housing Finance Corporation for North Haven Communities,” wrote Stacy Barnes, director of government relations and public affairs for AHFC. “We are limited with what we can say about active borrowers/negotiations … AHFC is a quasi-independent state agency and generally speaking, we’ll consider proposals that protect the interest of Alaskans.”
It’s not clear exactly what loan terms could not be satisfied. Neither side provided detail. Ron Johnson is the project director for North Haven Communities and expressed hope to break the deadlock.
“North Haven Communities, on its own, is not in a position to generate such a substantial investment or provide a one-time capital injection such as this,” he said in a prepared statement. “Lendlease values its partnership with the project lender and remains hopeful that an agreement can be reached on the necessary changes to allow North Haven Communities to participate in and receive the much-needed capital injection to complete the additional proposed development scope at Fort Wainwright.”
The new financing would allow North Haven to replace 80 eight-plex homes in the Northern Lights neighborhood, the garrison’s oldest, with 44 new units. Construction was slated for 2022 with occupancy planned for 2023, according to a summary provided by the Fort Wainwright’s Public Affairs Office.
The base was also looking at renovating 229 housing units, including 40 major renovations in the Taku Gardens neighborhood, 155 medium renovations in the Southern Cross neighborhood and 34 medium renovations in the Bear Paw neighborhood.
North Haven Communities earns most of its income through the collection of service members’ Basic Allowance for Housing payments, which are provided directly to the company by the U.S. Army.
Contact staff writer Amanda Bohman at 459-7545 or follow her at twitter.com/FDNMborough.