Construction on $15 million affordable-housing project in Lancaster city is pulling closer to the starting bell.
The developer, a Lancaster-based real estate investment fund called OZFund Inc., has landed a low-interest $1.8 million loan to help cover the costs of stormwater remediation and a “green roof” for the project, which is slated for 800 S. Queen St. in Lancaster.
The loan, at a rate of 1.75%, came from the Pennsylvania Infrastructure Investment Authority, known as PennVest.
OZFund’s next step is to secure bank lending for the $15 million project, said Jeremy Feakins, a British-born entrepreneur who is founder and CEO of the fund.
Once that is in hand, the company can begin demolishing two existing buildings on the site and prepare it for new construction,
“We’re very eager to get started,” Feakins said.
On what: A 52-unit apartment building with units priced at levels affordable to people making 80% or less of the area median income.
“We want to make these as affordable as possible,” Feakins said, noting there is a shortage of affordable housing in Lancaster.
Affordable is typically defined as costing no more than 30% of income.
The project also will include a roughly 7,000 square-foot grocery/convenience store with a focus on Pennsylvania-made and healthy items, said Feakins, who expects construction to last 12 to 18 months.
The original plan called for 72 apartments and more commercial space but it was scaled back to accommodate neighbors’ concerns about traffic, Feakins said.
The site was formerly home to a store called Rebmans, a name being revived for the new building.
The “green roof” — essentially a rooftop garden for the use of residents — will help absorb rainwater.
Other work funded by PennVest includes installation of underground filtration basins and pipes.
The goal is to limit runoff going into the Conestoga River and reduce stormwater flowing into Lancaster’s combined sewer system, which handles both sewage and stormwater.
Why South Queen Street: It’s in a federally designated Opportunity Zone, one of thousands of areas nationwide so designated under a Trump-era tax law.
Investors in Opportunity Zones can defer or reduce taxes on capital gains for a set period of time. But they generally must invest through qualified funds, of which OZFund is one.
So far, OZFund has raised $1.6 million from investors for the Rebmans project, said Feakins, who has kicked in another $500,000.
The project also was awarded $1 million from the state Redevelopment Assistance Capital Program, or RACP. Feakins said he is seeking additional public funding.
Once the Lancaster project is underway, OZFund plans to invest in other Opportunity Zones, Feakins said.
In addition to his role at OZFund, Feakins is chairman and CEO of Lancaster-based Ocean Thermal Energy Corp., which is developing technology to produce renewable energy and clean water.
