Citizens Bank launches new loan program

Friday, January 28, 2005, BY CYNTHIA NEEDHAM Journal Staff Writer

WOONSOCKET -- When they tell you they're "Not your typical bank," they're not kidding.

To bolster construction of affordable housing in Rhode Island, Citizens Bank recently launched a multimillion-dollar low-income loan program for nonprofit developers.

Never mind that affordable housing has become something of a political football in recent years, Citizens officials say their program responds to a statewide crisis, while getting involved in the communities where they do business.

Yesterday, the Citizens Housing Bank landed its first official client, the Woonsocket Neighborhood Development Corporation.

The city-based organization was approved for a $6.9-million loan to be used to finance construction of Heritage Place, a mixed-use facility which is to include commercial property and retail space along with 43 units of rental townhouse apartments bordering the Blackstone River in the lower Bernon neighborhood.

The below-market, 25-year loan offers an interest rate fixed at 3 percent for the first three years. For the remainder of the term, the loan rate will be fixed to a prime rate with a 6-percent cap.

In the coming months, the bank intends to offer similar loans to nonprofit developers throughout New England and says it has about a dozen projects under review in Rhode Island.

Joseph J. MarcAurele, president and CEO of Citizens Bank of Rhode Island, said the decision to invest in the affordable housing cause was a no-brainer.

"The bottom line is affordable housing is a huge problem in this state," MarcAurele said. "We consider it to be our problem. A lot of people who work for us or could work for us are starting their careers and finding how expensive the cost of living is. Someone has to step up to the plate and help."

Joseph Garlick, executive director of the Woonsocket Neighborhood Development Corporation, has known that for years. Convincing others has been harder.

In 1999, Garlick spotted a vacant building on a healthy swath of land bordering the Blackstone River. His organization had alreadyrehabilitated 100 residential units on neighboring Constitution Hill -- a project that was lauded nationwide -- and was looking for an appropriate site for its next affordable housing development.

"You see a five-acre piece of land in a city, on a river and it doesn't take much imagination to see something great there," Garlick said, reminiscing yesterday.

In December 1999, a loan from the Rhode Island branch of Local Initiatives Support Corporation, a national community development intermediary, provided seed money for the proposed Heritage Place. From there, it was a matter of vision.

Once Citizens signed on as the primary lender, Garlick said the partners just kept coming. The Rhode Island Housing Resources Commission, the Rhode Island Housing and Mortgage Finance Corporation and a host of others were happy to sign on for the maiden Housing Bank project, which would at once add to Woonsocket's affordable housing stock while boosting the city's tax roles.

"The vision of this organization has brought in all the partners," Susan Baxter, chairwoman of the Housing Resources Commission said of the Neighborhood Development team. "Together we're going to work with the residents of this community to make a difference."

It should come as no surprise that 150 possible tenants have expressed interest in available rental units, more than a year before the Heritage Park complex is scheduled to open next spring. And why shouldn't they. For those who qualify, the two- and three-bedroom townhouses will cost just $500 to $850 a month.

These days, anyone passing the snow-covered construction site might mistake it for an upscale condominium development, with its stately, arched roofs and river views.

That's just fine with the Neighborhood Development team who have believed that the path to economic opportunity begins at home.

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