Case Study

Launchpad Apartments, Colorado Springs, CO

A Launchpad into Adult Life for Vulnerable Young Adults

6 min read

“Failure to launch” is a term sometimes used to describe young people who haven’t yet found their place in adult life. It is often used to describe homeless youth aging out of foster care. Now, if you were developing a project for those vulnerable young people to transition into the adult world, how might you signal your intention to them? In Colorado Springs, there is no doubt about it, as the project being built there is called Launchpad.

Launchpad Apartments, a 50-unit, $19.7 million development under construction now and slated to be finished in October, is being built by Cohen-Esrey Development Group of Merriam, KS, with Merchants Capital (a national leader in affordable housing debt and equity), the lead financial source. A local nonprofit, The Place (an advocacy group that focuses on youth homelessness), is a key partner in the development and will provide onsite case management and supportive housing services once the development is open. Launchpad is a permanent supportive housing (PSH) development and the first transition-aged youth development in the primary market area.

Merchants Capital, says Linda L. Hill, executive vice president of tax credit equity, was “the equity investor for the tax credits, but we also provided the construction financing.”

Low Income Housing Tax Credit equity on the deal came to $10.9 million, with a $12.1 million construction bridge loan.

Total development cost is $19.7 million, Hill says, counting the equity, the permanent loan, and about $5 million of soft debt from governmental sources. Colorado Housing & Finance Authority (CHFA) is instrumental in supporting developments that have a critical impact on residents and local communities. In May 2022, CHFA awarded tax credits and is also providing a $2.3 million permanent loan. CHFA, along with the Colorado Division of Housing, El Paso County, City of Colorado Springs, Impact Development Fund, Pikes Peak Real Estate Foundation (PPREF), and Colorado Health Foundation, all made this community a reality. Healthy housing is the first step in empowering people to thrive.

The construction site is adjacent to a grocery store and shopping center, 400 feet from two bus stops, and within half a mile of a medical clinic, pharmacy, public park, and a Head Start office.

Lisa Sorensen, development director at Cohen-Esrey and based in Denver, says the idea to give the project the evocative name of “Launchpad” originated with The Place.

“We liked it from the start,” Sorensen says.

While there are “a variety of circumstances” that could result in a youth being placed in the Launchpad Apartments, “it’s generally out of foster care.” The income level is at or below 30 percent of area median income (AMI), and the age requirements are 18 to 24.

Stop the Cycle
“The end goal of Launchpad Apartments is to provide stability, safety, and training to youth to stop the cycle of homelessness and trauma before it can become a lifelong pattern,” according to the partners.

Sorensen notes that these youth may not be facing a smooth glide into adult life once they age out of foster care. “These young adults may not have a track record of established housing to qualify for other housing, and Launchpad gives them a foundation to build that housing history,” she says.

“While the set-aside is for homeless youth ages 18 to 24, if there are no referrals available, the developer can rent to otherwise qualified tenants that are either homeless or disabled, and they do not need to be within the age requirement. The soft set-aside allows for youth that age out of the targeted 18 to 24 age group to continue residing at the Launchpad Apartments, allowing for a successful transition,” the partners say.

Hill notes a rental subsidy (a 20-year Section 8 HAP contract on all units) will help these types of youths qualify for housing. “We have a contract with the Division of Housing to receive vouchers for the units,” Sorensen says. Tenants will pay 30 percent of their income towards rent. The Colorado Division of Housing prioritizes PSH development for at-risk and homeless residents. The vouchers were awarded alongside the services that will be provided by The Place.

The Place has a track record of setting up young adults in a dispersed housing model. They’ve been doing this for years, Sorensen says. But here, they will be delivering supportive services to youths in one community.

Hill notes there are a couple of other Colorado developments, like Launchpad, that have been done in Boulder and Denver (see sidebar).

The architect on the project is Shopworks Architecture, Denver, and the design has been completed, Hill says. The structure will be one four-story elevator building.

Sorensen characterizes it as a “trauma-informed design.” This kind of design helps with residents’ fears, anxieties, and fear of the unknown.

“You don’t want to have any blind walkways or corridors,” Sorensen says. “Lighting is extremely important. Open common areas are also important. There are many things that we have taken into consideration.”

Security Is Paramount
It is the same with exteriors, Sorensen says, as with open areas “to give a secure feeling so the outdoors can be enjoyed.” Unit amenities will include unitized HVAC systems, dishwashers, disposals, luxury vinyl plank flooring, microwaves, ceiling fans, and distress-detection technology, such as Halo Smart Sensors, which provide audio detection for specific words like “help.” Property amenities will include 24-hour onsite security and support services, an onsite management office, central laundry, landscaped outdoor gathering spaces, covered patios, e-bike charging stations, and a 2,200-square-foot community room with full kitchen and reading nooks, according to the partners.

Future tenants will be referred by The Place, Sorensen says, and referrals will also be made by the Pikes Peak Continuum of Care. Lease-up has yet to start, though.

This is the first project of this kind that Merchants has done in Colorado, says Hill, while Sorensen says her group has managed them out of state before.

Sorensen says there was “an overwhelming amount of support from the city and the community.”

Another Colorado Project Targets Vulnerable Youth

Besides the Launchpad Apartments in Colorado Springs, CO, another project targeting vulnerable youth is now being built in the state.

2700 Wewatta Way, Denver is set to be finished this spring. A co-development of Pennrose LLC and Rivet Development Partners, it comprises 56 units of housing for a similar 18 to 24 age group of homeless or exiting foster care cohort youth as the Launchpad Apartments.

Supportive services will be supplied by the nonprofit TGTHR.

First of Its Kind

Tax Credit Advisor covered this project in its October 2023 issue, noting that it is the first Low Income Housing Tax Credit project of its kind in the city or county of Denver.

The Colorado Housing and Finance Agency (CHFA) had a big role at 2700 Wewatta Place. Besides awarding the project tax credits, CHFA extended a $5.5 million permanent loan and $700,000 from its Capital Magnet Fund.

Redstone Equity Partners was the tax credit syndicator, American Express was the investor in the federal tax credits, Bank of the West (now owned by BMO Harris) was the investor in the state tax credits and the construction lender.

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.