BUILDING A
FOUNDATION
Midwest Housing Equity Group 2019 Annual Report
Corporate Philosophy Mission Statement:
Midwest Housing’s mission is to change lives for a better tomorrow by promoting the development and sustainability of quality affordable housing.
Vision:
Midwest Housing aspires to be the leading regional syndicator of low-income housing tax credits, recognized for its excellent track record of selecting, investing in and protecting quality real estate developments that revitalize the communities in which they are built.
Core Values:
Integrity: as fiduciaries, we are honest and up front in all of our transactions, avoiding even the appearance of impropriety or conflict of interest transactions. Stewardship: we are excellent stewards of our investments (and thus the residents), honoring our written and implicit commitments to our investors, developers, residents and communities. Excellence: we strive to be the best in the business, employing the best individuals, utilizing up-to-date processes and infrastructure, and conservative underwriting parameters. Local Presence: we are and will remain local, believing that a “boots on the ground� approach is the best way to understand and protect the developments. Employee-Focused: our employees are our strength. Recognizing that, we endeavor to provide ongoing development, training and advancement opportunities, to respect a work/life balance and to recognize and reward personal, department and company achievements.
On the Cover: Pinewood Village II, Breckenridge, Colorado
Contents Message from our President
2
MHEG Portfolio Summary
3
2019 Developments
5
Melissa’s Story
7
Equity Summary
9
Board of Directors & Committee Members
10
MHEG Staff
11
President & CEO’s Message Hello Friends! The theme of our 2019 Annual Report is Building A Foundation. A foundation’s purpose is to strengthen the home that is built upon it, to hold it together through even the worst weather. The stronger the foundation, the more the home can withstand. To me, a safe, decent and affordable home is the foundation upon which people can build a successful life. It provides safety and security, thus allowing you to focus on life’s other needs: health, nutrition, education, employment, family and achievement. Every home MHEG has helped finance, has helped to build a foundation for a family. A place to focus on school or work or just being together. In 2019, we raised over $200 million of new capital for new foundations. We invested in 44 developments, helping build 1,924 safe, decent and affordable rental homes. We are honored to be a small part of making a difference for so many. Of course, none of these accomplishments would be possible without all of our great partners. We are grateful to work with each of you to help build the foundations that create these success stories. Our investor partners are truly compassionate - they represent the best in corporate social responsibility and provide the equity capital necessary to construct the developments. Our developer partners identify communities in need, secure financing sources and put all the pieces together to get a property built. We also gratefully recognize our lending partners, contractors and property managers. It takes real teamwork to provide quality affordable housing. On the MHEG side, I want to thank our volunteer Board of Directors and Operations & Investment Committee members and our great team. I continue to say it each year because it is true, but it is an honor to work with all of you. Thank you for taking the time to read our 2019 Annual Report. We look forward to Changing Lives for a Better Tomorrow in 2020!
John J. Wiechmann President/CEO
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2019 Portfolio Summary
20,000 units
42%
multifamily age restricted
15,000 units
18,998 units
Breakdown of Development Type
34%
single family
10%
special needs
14%
10,000 units
5,000 units
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
MHEG TOTAL
3
ARKANSAS
COLORADO
IOWA
KANSAS
MINNESOTA
MISSOURI
Developments
590
8
13
80
151
4
26
Housing Units
18,998
288
1,178
2,773
4,318
148
1,283
Counties
210
8
9
28
50
4
22
Cities
263
8
10
35
67
4
22
Development Status operational
73%
lease-up construction disposed
17%
5%4%
Development Size
0-12 units
20%
33%
13-24 units 25+ units
47%
Development Location
59%
rural urban
5%
suburban
36%
Construction Type new
76%
rehab historic rehab
6%
18% NEBRASKA
OKLAHOMA
S. DAKOTA
TEXAS
216
74
9
9
5,663
2,682
364
353
50
31
2
6
66
43
2
6
4
2019 Developments In 2019, MHEG partnered with 34 developers to close over $175 million in equity for 44 developments, creating 1,924 affordable housing units. This included 15 age restricted developments, 23 multifamily developments, four single family home properties and two special needs housing developments. Projects ranged from an 8-unit rural deal in Kansas to a 159-unit urban deal in Colorado, representing 35 Midwest communities.
Colorado
DeAnza Redevelopment, LP Poncho Springs - 36 multifamily units Developed by: Sleeping Indian, LLC Remington I LLLP Fort Collins - 124 age restricted units Developed by: DMA Plaza Inc. Renova V LLLP Longmount and Boulder - 159 multifamily units Developed by: Thistle Communities
Iowa
CHI North Bay, LLLP Fairfield - 24 multifamily units Developed by: Community Housing Initiatives, Inc. Mill Farm Partners II, LLC Pella - 48 multifamily units Developed by: Overland Property Group
Missouri
California Apartments MO, LP California - 40 multifamily units Developed by: Southeast Holding, LLC Keeth Village Crocker, LP Crocker - 16 multifamily units Developed by: HRMS Westport Marshall, LP Marshall - 36 multifamily units Developed by: Missouri Valley Community Action Westport Village Marshall, LP Marshall - 24 age restricted units Developed by: Missouri Valley Community Action
Minnesota
The Mill Townhomes of Staples Limited Partnership Staples - 42 multifamily units Developed by: The Mill Townhomes LLC
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Kansas
7th Day Senior Housing, LLC Kansas City - 24 age restricted units Developed by: Windy Ridge Development, LLC & Horizon Real Estate, LLC Bethel Estates of Lawrence Phase II, LP Lawrence - 42 age restricted units Developed by: Wheatland Investments, LLC Eileen’s Place, LLC Kansas City - 60 multifamily units Developed by: Vecino Bond Group LLC Epworth Senior Residences, LLC Hays - 90 age restricted units Developed by: Hays Services, LLC Fieldcrest, LLC Valley Center - 40 age restricted units Developed by: Mennonite Housing Rehabilitation, Inc. Fort Scott Lofts, LLC Fort Scott - 25 multifamily units Developed by: Flint Hills Holdings Goddard Senior Homes, LLC Goddard - 24 age restricted units Developed by: Excel Development Group Lindsborg Place LLC Lindsborg - 8 special needs units Developed by: Vintage Construction, LLC Neosho Plaza, LP Council Groves - 33 age restricted units Developed by: Tier 1 Development Group, LLC
Nebraska
Oklahoma
4834 S. 23rd Street LLC Omaha - 44 multifamily units Developed by: Arch Icon Development Corporation
Eagle Flats, LLC Elk City - 35 multifamily units Developed by: Excel Development Group
Columbus Cherry Creek, LLC Columbus - 32 multifamily units Developed by: Mesner Development Co.
Inola Villa, Limited Partnership Inola - 24 multifamily units Developed by: Green Companies Development Group, Inc.
Highlander Phase III, LLC Omaha - 60 age restricted units Developed by: Brinshore Development LLC
Lakeland Cove Senior Village, LP Eufaula - 48 age restricted units Developed by: Arzon Housing Corporation
Horizon Estates, LLC Holdrege - 18 multifamily units Developed by: Mesner Development Co.
Lindenwood Townhomes I, LLC Durant - 14 multifamily units Developed by: Express Development & Desert Ridge Investments
424 S. 24th Street, LLC Omaha - 30 multifamily units Developed by: Arch Icon Development Corporation
Laurelbrooke Estates, L.P. Wahoo - 11 single family units Developed by: Dana Point Development Corporation MRES Cedarwood Holdings, LP Omaha - 150 multifamily units Developed by: MRS Cedarwood Developer, LLC Ohio 36 Limited Partnership Omaha - 19 single family units Developed by: Holy Name Properties, Inc. Osborne View Estates, LLC Hastings - 30 multifamily units Developed by: Mesner Development Co. Victory Apartments, II - Omaha, LLC Omaha - 60 special needs units Developed by: Burlington Capital Real Estate, LLC Villas at Crystal Court III, L.L.C. South Sioux City - 36 age restricted units Developed by: Excel Development Group
Claremore Estates, LP Claremore - 54 age restricted units Developed by: Midcontinent Equity Holdings LLC
Lindenwood Townhomes II, LLC Durant - 12 multifamily units Developed by: Express Development & Desert Ridge Investments Prairie Edge, LP Fairview - 28 multifamily units Developed by: Tier 1 Development Group, LLC Sayre Community Housing, LP Sayre - 40 age restricted units Developed by: Arzon Housing Corporation Stillwater Springs, LLC Stillwater - 120 single family units Developed by: LW Development, LLC Wildwood, LLC Sayre - 12 single family units Developed by: Excel Development Group
South Dakota Technology Heights II Apartments Limited Partnership Sioux Falls - 39 multifamily units Developed by: C.R. Lloyd Associates, Inc. The Residences at Greenway Limited Partnership Sioux Falls - 42 age restricted units Developed by: Affordable Housing Solutions Inc.
Texas
OPG Canyon Lake Partners, LLC Canyon Lake - 35 age restricted units Developed by: Overland Property Group OPG Maplewood Partners II, LLC Wichita Falls - 36 multifamily units Developed by: Overland Property Group
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Building A Foundation Melissa had lost about everything. After a string of bad luck, four accidents causing several injuries, she lost her house and was unable to work. Living in her car with her service dog Sophie, estranged from her family, sick and exhausted, Melissa was looking for a new start. She was looking for a different life. After a great deal of research, Melissa knew she wanted to move to Colorado. The outdoor activities would be good for her recovery, she just needed a place to live, a stable home that would allow her to heal and rebuild. She found Pinewood Village. Her life was about to change. Pinewood Village II was developed by the Breckenridge Housing Authority to help provide workforce housing for the resort town. The apartments are within walking distance to several stores, a pharmacy, and many employment opportunities. Public transit is also available. Moving into Pinewood II has made all the difference for Melissa, “It’s a huge relief for me, the stress. You can’t relax, we could never sleep, you’re using public restrooms.” She slept on the floor until she could afford furniture, but she was happy to have her own bathroom that was clean. Utilities are included at Pinewood, allowing Melissa to not worry about paying her electricity bill or if she’ll have heat during the winter. “I have a stable living environment that keeps me safe.
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I know how much I need each month to pay rent.” Instead she’s been able to focus on her health and working at a nearby bank. Melissa has also found a community within her building. Neighbors who look after one another and help each other. “I love this community. I feel like I am part of it, and I have never felt that before in my life.” Her favorite things to are sit and read by the window, enjoying the beautiful views. Living at Pinewood has fulfilled her purpose of developing a better life. “It a hundred percent changed my life. Getting into this unit and getting stability. I’m very grateful. It’s humbling, it makes me have more compassion for other people.” Pinewood II consists of 45 units and was funded through MHEG Fund 42, LP. It is currently managed by Corum Real Estate Group.
“I think having a stable place to live, is key to developing a better life.” 8
Equity Summary
$2.0B
$2.2 billion
$2.5B
$1.5B
$1.0B
$500M
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
In 2019, MHEG raised over $235 million in equity capital. Since inception, MHEG has raised over $2.2 billion of equity capital to invest in affordable housing.
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Board & Committees Board of Directors Barry Sandstrom - Retired President/CEO, Home Federal Bank - Chairman of the Board Dennis Brand - Chairman of the Executive Committee, BancFirst - Vice Chairman of the Board Frank Hayes - President, Hayes & Associates, L.L.C. Chris Hite - President, Sugar Creek Capital Kirk Kellner - Tri-State Regional President, Wells Fargo Dan Lonergan - Retired,Tenaska Capital Management Nicole Theophilus - Retired, West Corporation John Wiechmann - CEO/President, Midwest Housing Equity Group
Committees
Audit Committee
Budget & Compensation Committee
Frank Hayes - Hayes & Associates
Dennis Brand - BancFirst
Chris Hite - Sugar Creek Capital
Barry Sandstrom - Retired, Home Federal Bank
Kirk Kellner - Wells Fargo
Nicole Theophilus - Retired, West Corporation
Dan Lonergan - Retired, Tenaska Capital Management
Central Region Operations & Investment Committee
Northwest Region Operations & Investment Committee
Bob Arthur - Commerce Bank, N.A.
David Fisher - Midwest Housing Development Fund
Mark Dennett - INTRUST Bank, N.A.
Anthony Cerasoli - First National Bank of Omaha
Tracy Howren - UMB Bank, n.a.
Justin Horst - Pinnacle Bank
Michael Scheopner - Landmark National Bank
Randy Ilich - Colorado Federal Savings Bank
John Wiechmann - Midwest Housing Equity Group
John Wiechmann - Midwest Housing Equity Group
Northeast Region Operations & Investment Committee
South Region Operations & Investment Committee
Jennifer Cooper - Bankers Trust Tom Hanafan - Pottawattamie County Board of Supervisors Susan Whitson - First National Bank of Waverly John Wiechmann - Midwest Housing Equity Group
Brent Bates - Bank SNB Roger Beverage - Oklahoma Bankers Association Dennis Brand - BancFirst Daving King - MidFirst Bank - Tulsa Tom O’Keefe - INTRUST Bank, N.A. John Wiechmann - Midwest Housing Equity Group Mike Wynn - Mabrey Bank
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MHEG Staff Executive Staff
John Wiechmann Chief Executive Officer & President
Becky Christoffersen Chief Investment Officer
Jordan Abboud Vice President of Asset Management
Pat Michaelis Vice President Business Development Officer Central Region
Jason Main Chief Financial Officer
Ann Burge Chief Operating Officer
Tom Stratman Vice President of Acquisitions
Andrea Frymire Scott Fitzpatrick Vice President Vice President Business Development Officer Business Development Officer South Region Northeast Region
Evan Andrews Financial Analyst
Tyler Arens Acquisitions Manager
Kelli Baker Asset Manager
Lisa Bryan Administrative Coordinator
Sara Church Asset Manager
Traci Collins Acquisitions Manager
Tracy Connor Corporate Accountant
Dustin Daugherty Construction Manager
Sammy Ehtisham Assistant Vice President of Acquisitions
Shannon Foster Accounting Manager
Steve Gross Senior Financial Analyst
Ryan Harris Acquisitions Manager
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Brett Helt Financial Analyst Asset Stabilization
Jake Jacobsen Construction Manager
Shannon Johnson Accounting Assistant
Cindy Koster Senior Acquisitions Manager
Keely McAleer Corp. Communications & HR Administrator
Paul McDonald Senior Asset Manager
Trey Mendlik Financial Analyst
Sharita Nelson Compliance Specialist
Jennifer Niemier Closing Manager
Dana Oswald Accounting Coordinator
Shannon Powers Closing Manager Real Estate
Mike Powley Deputy Director of Operations
Amanda Raak Financial Analyst
Josh Rauner Fund Reporting Manager
Brad Reiff Acquisitions Manager
Cole Rogers Financial Analyst
Brooke Smith Senior Asset Manager
Laurie Stephenson Deputy Director of Compliance
Deb Swanson Closing Manager
Shellie Vandeman Compliance Specialist
Cindy Wieck Administrative Assistant
Joshua Yurek Director of Government Affairs
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Midwest Housing Equity Group 515 N. 162nd Avenue, Suite 202 Omaha, NE 68118 www.mheginc.com