A Respectful Partner Industry leader has nearly 30 years of experience taking on challenging affordable housing developments Canter Chase Apartments The Florence, Alabama-based Gateway Companies, a group of three subsidiary companies, provides construction (Gateway Construction, LLC), development (Gateway Development Corporation) and property management services (Gateway Management Company, LLC) for clients throughout the southeastern United States. The CEO and founder, Allan Rappuhn, started the organization in 1986, building on his experience and expertise in developing affordable housing for his previous employers. Gateway now employs over 150 people has home offices in Florence and Birmingham, Alabama. When the company was founded, the Tax Reform Act of 1986 was starting to take hold, eliminating many of the tax incentives previously available for multifamily housing developers. At the same time, the Act created Low Income Housing Tax Credits (LIHTC). Gateway leveraged these tax credits with other financing opportunities to build its portfolio of low- and moderate-income properties. The Gateway Companies President :: Amy Montgomery Location :: Florence, Alabama 8 AFFORDABLE HOUSING NEWS SPRING 2015 We started out our operations developing [Rural Rental Housing Loans Section] 515 properties, and utilized some of the very first low-income housing tax credits that were available at that time, says Amy F. Montgomery, President of Gateway Construction, LLC. We did that for a number of years and then moved into other kinds of financing as the
Heritage Vista Apartments RRH 515 funds were less available. Specifically, we concentrated on the use of HOME [HOME Investment Partnerships Program] funds. In Alabama and Georgia, these funds, which are administered by the Alabama Housing Finance Authority and Georgia Department of Community Affairs (respectively), are necessary to fill the financing gap that allows us to develop housing in rural areas. KNOWING THE AFFORDABLE HOUSING MARKET Over the years, the Gateway Companies has developed 98 properties in five states, totaling more than 5,200 units. Most of these developments have been structured to effectively use tax credits, leading to greater long-term financial sustainability. The firm has experience working with low-income housing tax credits, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Agriculture affordable housing programs, tax-exempt bonds, FHA, Freddie Mac, Fannie Mae, the Federal Home Loan Banks AHP Program, and conventional financing. The Gateway Companies currently has eight developments under construction in four states, with a goal of at least five new construction efforts a year for the foreseeable future. In fact, the company expects to close or start construction on five more properties in the first quarter of 2015 alone. Throughout the firm s history, the Gateway Companies has concentrated on forming strong relationships with financial partners and other stakeholders to ensure the best quality possible in the housing it delivers. We do not over-promise what we can deliver, and we always deliver what we say we are going to, Montgomery says. We try to be more conservative than our investors or our lenders. That way, we can generally deliver a better yield than we promised. According to Montgomery, Gateway s success is due largely to the way the Company approaches each development effort. The team is always careful to be realistic rather than over-promising, something its clients SPRING 2015 AFFORDABLE HOUSING NEWS 9
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Stoney Creek Stoney Creek Picnic Area Stoney Creek have come to appreciate and respect. The development team works closely with landowners, cities, neighborhood groups, and others to find workable solutions to real estate that has been too challenging for other firms to handle. The in-house team specializes in project conceptualization, design, feasibility determination, construction and financing. The company s construction management division, called Gateway Construction, also provides a broad range of supervisory services to owners. SUCCEEDING WHERE OTHERS HAVE FAILED We have been very successful with locating sites and putting together quality applications, and those two things are why we have had so much success in being awarded funding, Montgomery says. Our Property Management team consistently produces good results for our investors and lenders. They have done a good job not only with our portfolio that we own, but also with other [organizations ] portfolios. Maintaining compliance with various agency requirements is key to that success. In terms of property management, Gateway offers various services to owners, including hiring, training and supervising on-site managers and maintenance staff. The firm also handles initial lease-ups, accounting services, asset management, provides policies and procedures, compliance, human resource services, and tenant relations. Additionally, the firm s team is well versed in government and investor reporting, auditing and property tax appeals. To ensure the quality of these services, all of SPRING 2015 AFFORDABLE HOUSING NEWS 11
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the firm s regional managers and property managers undergo training in the Tenant Integrity and Certified Occupancy Specialist programs of the National Center for Housing Management. The managers also take courses on low-income housing tax credits, HOME, Fair Housing and compliance with Section 504 (Individuals with Disabilities Education Act) requirements. Additionally, Gateway s relationships with its industry partners is critical to its success. We have been working with the same professionals for years. says Montgomery. Working with folks like our architects (McKean and Associates, Montgomery, Alabama), our attorneys (Coleman, Talley, - Atlanta and Bradley Arant, Birmingham, Alabama) and our accountants (Frost Cummings Tidwell, Birmingham, Alabama) allows us to bring the vast talents and years of expertise these firms offer to each of our projects. In all that the company does, the Gateway Companies team leverages progressive tools, industry publications, professional training and the resources of trade organizations to apply best practices to all properties. This involves working closely with homeowners, public officials, tenants, nonprofit organizations and housing authorities in various communities to ensure all properties are well maintained, fully Palladian at Jubilee Ridge Community Room Palladian at Jubilee Ridge Fitness Center Palladian at Jubilee Ridge SPRING 2015 AFFORDABLE HOUSING NEWS 13
occupied and financially and environmentally sustainable. A MORE DIVERSE PORTFOLIO Although one of the Gateway Companies core competencies continues to be affordable housing funded through tax credits and HUD programs, there have also been opportunities for the firm to branch out into different areas. According to Montgomery, this will likely continue as the company moves ahead. Over the past couple of years, we have begun developing more conventionally financed properties that do not use tax credits or other affordable housing components, she says. We have been building more class-a type properties in some of the larger markets. We have had very good success with those developments and foresee Gateway continuing to develop projects of this type in the future. WE HAVE BEEN BUILDING MORE CLASS-A TYPE PROPERTIES IN SOME OF THE LARGER MARKETS. -Amy Montgomery Oakland Grounds Oakland Mill Sign Allan Rappuhn Ribbon Cutting-Sullivan Village 14 AFFORDABLE HOUSING NEWS SPRING 2015 Oakland Mill Community Room