Real estate ventures have the ability to transform communities.
On a long-blighted, 3.3-acre site a mile from Morgan State University (MSU), MCB Real Estate embarked on a plan to create the first privately built, off-campus housing development for MSU in 20 years.
The venture faced the predictable challenges of a redevelopment on a brownfield. Crews needed to demolish four vacant buildings and complete extensive abatement on a site that had housed a used car lot and other businesses. The development team had to resolve a title issue with a neighbor and arrange to relocate a critical piece of infrastructure — a major BGE power line running through the middle of the property.
It also faced a large, financial hurdle.
“Student housing is a super popular asset class. If you go to College Park, you see cranes for new apartment buildings everywhere,” said Amy Bonitz, Managing Director of Community Development at MCB Real Estate.
That popularity, however, is restricted to Tier 1 universities with more than 20,000 students.
“For a small university like Morgan State which had about 7,000 students at the time, institutional funds don’t consider student housing to be even worth looking at,” Bonitz said.
But that’s when the development team began to show how strong partnerships could have big impact. The Morgan State Foundation provided a critical first piece of funding. MCB garnered buy-in from foundations in Maryland and social impact investors nationwide. MCB’s partnership with Hamilton-Lauraville Main Street helped land a grant to offset site cleanup and infrastructure costs. Finally, MSU’s decision to sign a master lease for the privately built complex attracted other investors.
“The 100 percent university-backed revenue steam was a decisive factor that allowed MCB to close a complex capital stack on a $58 million brownfield project,” Bonitz said. “With day-one certainty, lenders and impact investors saw bankable cash flow where they previously only saw risk.”
MCB’s close partnership with MSU and collaboration with neighbors and area businesses also helped deliver an outstanding product. The design and positioning of the serpentine-shaped building was tailored to create an attractive property without negatively impacting adjacent single-family homes. The five-story, 473-bed complex provides students with first-rate amenities, a private bathroom for every resident and “a safe, high-quality place to live which is foundational to being successful in college,” she said.
Named after Enolia Pettigen McMillan (a civil rights leader, lifelong educator and the first woman to serve as President of MSU’s Board of Regents), the building celebrates local history through interior displays and “gives students the sense that they are walking on the shoulders of incredible people. We want to empower them to be the next Pettigen McMillan,” Bonitz said.
The project, she added, has also demonstrated how a public-private partnership can be an economic engine for the city. Located in a formerly blighted stretch of Harford Road, The Enolia has enlivened the area between two commercial districts.
The addition of nearly 500 student residents in the neighborhood “has generated a lot more traffic on the street and more patronage at local businesses,” Bonitz said.
The neighborhood Safeway actually struggled with bare shelves for a few weeks after The Enolia opened until it adjusted its food purchasing levels. Four new businesses have opened near The Enolia and the developers anticipate it will drive further, local investment.
Featured in this article: MCB Real Estate, The Enolia, Morgan State University and Hamilton-Lauraville Main Street