Walter Reed MF Partners LLC is a collaboration between the owners of two experienced development firms—Blue Sky Housing and Evergreen Urban—to revitalize a four-story administrative building on the former Walter Reed Medical Center campus in Washington, D.C. Now known as The Parks at Walter Reed, the century-old site is being redeveloped into three million-square-feet of housing, retail and services.

“Building 12” at Walter Reed was originally built to house the Army Nurse Corps and, in later years, general administration for the campus. The sponsors acquired the property and are renovating it to make space for a 10,000-square-foot Hazel’s Hardware Store, which is named for General Hazel Johnson-Brown, the first African American woman to serve as general in the U.S. military. When completed, the upgraded building will also house a coffee shop, a wholesale coffee business and office space for additional businesses.

The $6.7 million Building 12 project is one of the later stage efforts at The Parks at Walter Reed, which has already seen hundreds of units of housing developed, along with schools, health facilities, retail and green space.

To support the renovation of the building, Broadstreet committed nearly $1.6 million from the NMTC Thriving Communities Fund, a $35 million fund capitalized by TD Bank and managed by Broadstreet. The fund leverages New Markets Tax Credits (NMTCs) to strengthen low-Income communities, most notably by supporting quality jobs for people facing employment barriers and fueling community facilities that offer needed education, health, and social services.

The financing flowed to a $5 million NMTC investment led by Industrial Bank. In addition to the Broadstreet commitment, the sponsors drew on loans from both TD Bank and Main Street Bank, several grants and more than $1.7 million of their own equity to support the development.

The sponsors faced a financing gap that could not be filled by conventional capital because of the unique nature of the main tenant. The two major sources of revenue for the hardware store are expected to be commercial contracts and construction materials—neither of which can be accessed until the store is opened. That uncertainty creates risk for traditional lending models; with NMTCs, funds and investors can intervene to finance valuable, community-focused opportunities like Building 12.

When completed, the project is expected to create 55 new jobs—all of which will pay a living wage as well as come with benefits. Notably, the sponsors are committed to a Community Benefits Agreement that prioritizes employment outreach in the surrounding Ward 4 community.