'Unprecedented' investment fuels $27 million makeover at downtown Erie's Richford Arms

Josh Cohen is headed to Erie to celebrate the kick-off of the extensive, multimillion-dollar renovation of downtown's Richford Arms apartment complex.

Cohen, the president of development for the apartment complex’s Boston-based owner, Beacon Communities, will be joined by Erie Mayor Joe Schember, representatives from Erie Insurance and other local officials on Monday afternoon to officially launch the $27 million project.

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The event will take place at 2:30 p.m. at the Erie Art Museum’s Holstein Gallery, 20 E. Fifth St., which is near the 100-unit Richford Arms building at 515 State St.

Beacon Communities’ plan for upgrades at Richford Arms — which provides affordable housing to low- and moderate-income downtown residents — are fueled by a $3.5 million low-interest loan from Erie Insurance, the Fortune 500 company whose downtown campus is adjacent to the apartment complex, and $2.45 million in loans from the city of Erie.

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Cohen added that the Erie Insurance financing is “unprecedented” when it comes to the company’s affordable housing developments nationwide.

“For a Fortune 500 neighbor who is not in the affordable housing business to see the importance of this and decide to make a major investment, that’s a rewarding and unique thing for us,” Cohen said. “And the city of Erie has also been extremely supportive of this project.

“We consider this an official groundbreaking celebration that lets us acknowledge all the work that got us to this point,” Cohen said. “We believe that good, affordable housing is a part of having a thriving city.”

Richford Arms tenants range from people in their mid-20s to those in their early 90s. Tenants receive Section 8 rental subsidies or other assistance through the federal Department of Housing and Urban Development.

The planned improvements include a new entrance for residents; a raised outdoor terrace with seating, planters and lighting; a new two-story addition to the north of the building, at the site of Richford Arms' existing parking lot, that would include kitchen space, a television room, new laundry room, a wellness/fitness center, support offices and storage, as well as six new apartments.

Also included are improvements to the building's ground floor retail storefronts, new common areas for wellness programs and renovations to various apartments and corridors.

Preliminary work has begun at the apartment complex, according to Beacon Communities officials. Cohen said that Beacon hopes to have the work finished as soon as December.

Richford Arms resident Ethel Wheat, 72, is excited.

"I can't wait. Everything is going to be new and that's the best thing," Wheat said. "They're already working on a lot of things."

Financing breakdown

Erie Insurance invested in the Richford Arms project “as part of the company’s longstanding commitment to downtown Erie," company spokesman Matthew Cummings said.

“Beyond the financial lift that our low-interest loan provides to the project, our partnership with Beacon has allowed us to learn more about the company and its approach to improving quality of life for its residents,” Cummings said.

“Beacon’s commitment to this project and the residents of Richford Arms aligns with our vision of a diverse and equitable community and our downtown revitalization efforts.”

The city of Erie has approved two loans for the project, totaling $2.45 million.

One is a $1.7 million, 30-year, zero-interest loan that comes from three federal sources: Home Investment Partnerships funds, money from the Community Development Block Grant program and dollars allocated to the city via the Coronavirus Aid, Relief, and Economic Security Act.

The money used to provide the loan to Beacon Communities from those three sources, according Debra Smith, the city’s economic development director, was allocated to the city between 2017 and 2021 but was not spent on other projects.

HOME funds are used by the city on projects that emphasize homeownership opportunities, promote the stabilization of neighborhoods and help develop rental properties for low- and moderate-income residents.

Erie uses CDBG funds each year for community projects such as street paving, sidewalk improvement, housing programs and homeless shelters, as well as to partially fund a number of local nonprofit social service agencies and Erie's community centers.

The city typically gets more than $3 million in CDBG and HOME funds, combined, each year.

CARES Act dollars are emergency funds the city received in 2020 because of the COVID-19 pandemic.

The city is also providing Beacon Communities a $750,000 loan exclusively from city HOME dollars. Federal guidelines allow the city to loan the money to Beacon Communities at zero interest, Smith said, because the funds are being used to create or improve affordable housing.

Schember said the Richford Arms project gives a much-needed boost to affordable housing in Erie.

City officials have said the Richford Arms project complements recent, multimillion-dollar downtown investments by groups such as Erie Insurance, the Erie Downtown Partnership and the Erie Downtown Development Corp.

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“We are excited about the opportunity to positively impact the quality of life for the residents and look forward to seeing the renovations,” Schember said.

“This project complements the many other projects taking place right now that are transforming downtown Erie, and we appreciate Beacon Communities for their investment, their commitment, and their belief in Erie.”

The bulk of the Richford Arms work is funded by $12 million in tax-credit financing from the Pennsylvania Housing Finance Agency.

Such tax credit programs allow businesses to invest in housing-related projects. In exchange, those businesses get a percentage of their financial investment back via tax credits.

Cohen said the project's PHFA financing provides roughly $1.2 million annually for 10 years, for a total of about $12 million.

Cleveland-based KeyBank and national housing finance giant Fannie Mae are also providing funding for the project, Cohen said.

'Housing stability'

Formerly the 400-room luxury Ford Hotel, Richford Arms opened in May 1928 touted as “Erie’s first fireproof hotel."

The building later became known as the Richford Hotel.

Cohen has said that no Richford Arms residents will be displaced by the renovations, although some residents might have to make a "one-time move" to a newly renovated apartment as the work takes place.

The COVID-19 pandemic, Cohen said, underscores the importance of the upgrades.

“The pandemic has sort of emphasized and pulled the curtain back on how vulnerable people can be when they don’t have housing stability,” Cohen said. “It emphasizes the critical importance, to us, of affordable housing assets like Richford Arms and it has absolutely underlined our mission.”

Contact Kevin Flowers at kflowers@timesnews.com. Follow him on Twitter at @ETNflowers.

This article originally appeared on Erie Times-News: Richford Arms in Erie: $27M renovation to downtown Erie apartment building