The Bon Air and Richmond Summit Apartment complexes both sold recently to Redwood Housing out of Redwood, Texas. The Bon Air sold for $15.25 million and Richmond Summit’s sold for $9.5 million.
Both properties were previously hotels and are on the national historical register. Locally, Historic Augusta designates the properties as “endangered.”
The Richmond Summit consists of 135 units and the Bon Air 202. According to the marketing materials provided by the listing firm, the 337 units are 100% Section-8 HAP contract based for senior and disabled tenants.
Richmond Summit is located at 744 Broad St. and the Bon Air at 2101 Walton Way.
Each of the apartment complexes are under the Housing Assistance Program (HAP), a Housing and Urban Development (HUD) program that awards developers with tax credits in exchange for keeping rent costs below market rates to make for more affordable living.
There’s a set number of years that the under-market rates must continue. According to documents from Jones Lang LaSalle, who facilitated the sale, the Bon Air HAP contract expires in 2034, and the Richmond Summit HAP contract expires on May 27, 2021.
The tax credit programs can be renewed at the end of the HAP contract which enables developers to make significant improvements to the property. It is unclear if the Richmond Summit HAP contract has been renewed.
HAP contracts typically have a lockout period of five to ten years at the expiration of the HAP contact during which the property must maintain rents at predetermined below-market rates.
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Until the program contract expires, the rents are set below market rates by HUD as a way to promote affordable housing. After that period and the lockout period, the properties are fair game to convert to traditional market rate rents.
The property offerings were bolstered by their proximity to Fort Gordon, Augusta National, Georgia Cyber Center, and Augusta University. It remains to be seen when either property will experience significant change, and if the stigma surrounding both properties will be renovated as well.
Redwood Housing could not be reached for comment, nor could Jones Lang LaSalle. The Augusta Housing Authority was unaware of the sale, as was a member of the Augusta Commission.
BON AIR
The Bon Air was previously a Vanderbilt Hotel that opened in 1923 to replace the original hotel which burned in 1921, according to a letter from Erick Montgomery the Executive Director of Historic Augusta.
The hotel closed in 1960. Historic Augusta’s website lists the property as endangered and states, “The current use of the building is residential apartments for senior citizens and those in the low income demographic. The Bon Air is listed as a contributing structure in the Summerville Historic District listed on the National Register of Historic Places. Over the last several years, the architectural character and historic integrity of the building has been compromised with the removal of significant defining features such as balconies and historic windows.
RICHMOND SUMMIT
Montgomery also said the Richmond Summit was built in 1923 to replace the Albion Hotel which also burned. The Albion replaced the Arlington Hotel which was destroyed in the fire of 1899.
According to Historic Augusta’s website, the Richmond Summit was converted to 125 one-bedroom apartments in 1979. The project has been subsidized rentals since 1979.
The Richmond Summit should continue to serve Augusta as both a commercial and residential anchor within the Augusta Downtown Historic District. The exterior of the building still retains much of its historic integrity and would likely be able to be certified for state and federal rehabilitation tax credits. With ongoing reinvestment in the downtown corridor, there would be interest from local investors to create residential units for professionals and medical students who work at nearby cyber facilities or desire to be near the medical district.
Tyler Strong is the Business Editor for The Augusta Press. Reach him at tyler@theaugustapress.com.
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