Palace

View

Apartments

Danbury,       Connecticut

Introduction

The Developer

The Residents

The Member

The Architect

The Numbers

Danbury

The Member

John Kline is executive vice president and chief operating officer of member Union Savings Bank of Danbury, Connecticut.

John Kline.

Members of the Nolan family are long-standing developers and property owners here in Danbury. They also happen to be customers of the bank. Union Savings Bank is one of the larger community banks in greater Danbury.

Mark Nolan, the developer, approached us to help support the development of Palace View Apartments. But it was also a natural for us. We're a member of the Federal Home Loan Bank of Boston and Charles Frosch (Union Savings Bank's president and chief executive officer) is a member of its board. So it made a lot of sense on a number of fronts for us to form a partnership with the developer.

We worked with the developer to apply for a Federal Home Loan Bank of Boston Affordable Housing Program grant and used a Bank advance to match-fund our end loan for the project.

The critical thing for us in working with the Nolans and with The Non Profit Rental Housing Corporation was that they had experience developing these types of properties. It was very important to us to be working with someone who understood the ins and outs of Low Income Housing Tax Credits and the other alternative funding sources needed to pull together the project.

That was the most critical factor. We had faith in their ability to understand how to do this, because it's a very detailed process to pull this off.

It's important to have partners who can get the project in on schedule and budget. A problem we often see with developers of affordable housing is that they may be able to do a lot of the front-end things but they may have problems when it comes to the back end — such as being able to stick to a project plan and get it done. The Nolans have done an excellent job of doing that over the last few years and have demonstrated their ability to us. This made us feel a lot more comfortable working with them.

The affordable-housing situation is very tight in Fairfield County. It's a high-income area with a limited number of developers out there making affordable rental housing available.

The Local Economy
The economy down here has been reasonably strong even through this latest downturn. Connecticut overall was really hard hit in the last recession because the defense and insurance industries took a major hit. Those two industries are really strong throughout much of the state.

Fortunately, we have diverse businesses in greater Danbury. We have some large corporate participants based in the area. But they're not large enough to create waves of change in the community.

In the last recession, our unemployment rate was significantly below the rate throughout Connecticut. And even through we've seen some recent slowing in this last downturn, employment overall has remained pretty strong. This is a good news-bad news story when it comes to affordable housing, because the good wages and the higher-educated workforce has a tendency to drive housing prices pretty high.

Main Street, Danbury.

An Immigrant Population
In Danbury, we've had a significant influx of Brazilians; this is creating additional demand for affordable rental housing. We probably have about 18,000 Brazilians living in greater Danbury at this point. The good news is that there are jobs, but the bad news is they're using a lot of their income just to house themselves. So there's a real need to provide more affordable rental housing.

Many immigrants start out working in the construction trades or in service-related jobs such as cleaning. A lot of the immigrants come with education and start to migrate from some of the basic jobs to more mainstream jobs once they overcome the language barrier.

Many Brazilians are also starting to become shop owners along Main Street. They're filling some of the gaps left by retailers that have moved out over the past few years. They're starting to create Brazilian restaurants and shops that sell clothing, food, and other products. Some of these folks are coming in with business savvy, but they first need to create nest eggs, which they're doing.

We happen to bank a lot of these folks, which is great. We're sort of riding their success. We're definitely the bank of choice for the Portuguese (an earlier immigrant group) in this region. We've provided a lot of support for them over the years. And now we're starting to follow that same cycle with the Brazilians who are moving in.

Union Savings Bank
Union Savings Bank was founded in 1866. We now have 16 branches, with our dominant core market being the seven-town region around Danbury.

Our bank is a mutual savings bank, so we don't have shareholders to answer to. We put a lot of our money back into the community. We're based here in Danbury, but our market is western Connecticut.

Eight years ago we were a $450 million bank, but today we're a $1.1 billion institution. In 1996, we acquired seven branches, or about $186 million in deposits, from a bank that had purchased the branches of a failed institution in greater Danbury. That purchase took us up to just over $600 million in 1996. From 1996 on, our growth has been organic. Our success has been based on building additional retail business as well as expanding the commercial base, which has been growing pretty significantly over the last few years. Some of the other banks have not been serving that middle-market business need.

We have a vested interest in Danbury in particular. We have our main office building on one side of Main Street and another office building across the street. We developed the second office building when downtown was trying to come back after years of decline.

We have sizable investments in downtown Danbury. We see opportunities to support projects such as Palace View as a way to ensure that downtown remains viable and has the elements — such as affordable housing — that provide support for downtown services and amenities.

Obviously, we get CRA (Community Reinvestment Act) credit for something like this, but we don't look at CRA projects per se as being the objective. We look at everything we do as being part and parcel of what CRA is all about.

There aren't too many affordable-housing projects in our area, so when we see an opportunity to work with an experienced affordable-housing developer, we look at it as a great learning experience. In fact, we have done a subsequent project with the Nolans.