With the loan from the local Carmel office, Ind. Merchants Bank of Indiana, East Lake will develop the Gateway Apartments at 2050 W. Ogden Ave. advance, which will include one and two bedroom “units aimed at medical staff, students and faculty working within the IMD, the developer said.
An East Lake spokeswoman declined to disclose the value of the mortgage. But funding is an important step forward for a project that largely stagnated for half a decade as its previous development team, led by Chicago developer Jack Higgins, battled for financial support. Higgins sold its stake in the company early last year to Higginbottom, who received approval in July to begin foundation work on the 11-story residential building.
Work is now underway on the building, which, according to East Lake President Eileen Rhodes, should be completed by May 2022.
“The housing shortage at IMD has been a missed opportunity for years,” said Lee Oller, executive vice president of Merchants Capital Chicago. “Securing this complex financing structure and finally bringing new, modern rental apartments to the area is an incredible success for Merchants Capital and our development partners at East Lake Management & Development.”
In addition to the construction loan, East Lake said in its statement that it had received a Freddie Mac Forward Commitment for Permanent Financing, a program that allowed it to set an interest rate on long-term financing. The program targets certain types of affordable housing and gives developers peace of mind that they will be able to pay off their construction loan once the project is complete.
While East Lake continues with the apartment project, Rhodes is still looking for funding for a six-story Hilton hotel it is planning for the location, according to Rhodes. East Lake also received approval last summer to begin foundation work on this project.
Under the direction of Higgins, the development company built two single-story retail buildings on the site that were rented by retailers such as Starbucks, Chipotle, AT&T, Jimmy John’s, Eye Q Optique and Five Guys.
Developers have been keeping an eye on new residential and hotel projects at IMD over the past few years as the healthcare sector expands.
Chicago developer John Murphy recently turned part of the former Cook County Hospital into a Hyatt House and Hyatt Place hotel with 210 keys. The Gateway development site is also in the corner of a location where Naperville-based developer Marquette is completing work on a 272-unit residential building on W. Harrison St. from 1926 and is preparing to develop a new 24- storey residential building with 280 units prepared residential building next to it.