This article was updated on March 4.

ORLEANS — Applications are now open for a new affordable housing development at the site of the old Cape Cod 5 Bank headquarters on West Road. The development is being built and will be managed by Pennrose, a Philadelphia-based for-profit firm, as the company’s second affordable housing venture on Cape Cod after Eastham’s Village at Nauset Green.

The project, called “Phare” after the French word for lighthouse, includes 62 units for mixed-income residents; 52 units are in the refurbished and expanded headquarters building. The remaining 10 are in two new buildings on the lot.

The units are a mix of one-, two-, and three-bedroom apartments. Tenants’ income for 43 of them is capped at 60 percent of the area median; for 10 units, income is capped at 80 percent of AMI. In Barnstable County, AMI for a family of four is $126,650, according to 2024 data from the Mass. Housing Partnership.

The remaining nine units in Phare — five with one bedroom, three with two bedrooms, and one with three bedrooms — are reserved for applicants with very low incomes, up to 30 percent of AMI. For a family of four in Barnstable County, that’s $37,995. Those units will be made available through the state’s Project Based Voucher and Mass. Rental Voucher programs.

Tenants will be chosen in a lottery, for which applications close on April 8.

The lottery will be conducted on April 22 over Facebook Live and will give preference to applicants who live, work, or have children who go to school on the Outer and Lower Cape. Winners won’t be guaranteed a unit at Phare — rather, they’ll be able to participate in the full application and interview process, which is set to begin as soon as the lottery is over. According to Pennrose’s website, residents could be moving in as early as May.

Phare’s website advertises the development’s proximity to Routes 6 and 6A, as well as its proximity to the Skaket Corners shopping center. The website also promises a community playground, garden, fitness center, and resident lounge to be located in the complex.

Cape Cod 5 President Bert Talerman said that the project is “a higher and better use of the property” than what his company had been doing. “Does it solve the tremendous shortage of housing we have in this community? Absolutely not,” he said, “but it makes a dent.”

Cape Cod 5 vacated its old headquarters in January 2020, when the bank moved corporate offices into a new building off Route 132 in Hyannis.

The bank agreed to delay the sale of the old headquarters when the town of Orleans opted in 2019 to do a feasibility study of the 23,000-square-foot property as a possible site for affordable housing. “It was determined that it would be a fantastic site,” said Orleans affordable housing coordinator Elizabeth Jenkins. Once Pennrose stepped in, Jenkins says, the town took on the role of a “funding partner.”

The total price tag for Phare’s construction was $37 million, according to Karmen Cheung, a Pennrose vice president; $2 million of that was provided by the town of Orleans through Community Preservation Act funds, and $500,000 was provided by other towns’ CPA funds. The remaining money was provided by the state through MassHousing, ARPA, and low-income housing tax credits.

A Private Transaction

Talerman said that Pennrose first reached out to Cape Cod 5 in early 2020, just before the bank moved into its new headquarters. Pennrose bought the bank’s old headquarters on Jan. 4, 2024 for $3,250,000.

The town wasn’t involved in that transaction, Jenkins said, despite the fact that it was working with Cape Cod 5 at the time on the feasibility study. “As we were working cooperatively with Cape Cod 5, Pennrose reached out independently and did a private transaction,” she said.

Many of the Cape’s affordable housing projects involve the town as landowner, Jenkins says. “We don’t have a lot of large developers working here on the Cape,” she said, “but in the broader world of housing it’s not uncommon at all.”

Jay Coburn, president of the nonprofit Community Development Partnership, said the cost of land is to blame. “It’s impossible for an affordable housing project to pencil out without free land,” he said. “Usually developments happen on a town-owned parcel that the town put out an RFP for, typically with a 99-year ground lease.”

Coburn said that this particular transaction makes sense, given that the land was already privately owned. Nevertheless, he called the situation “unfortunate,” saying that he would rather see multiple developers compete through the issuance of an RFP than have landowners select a single developer on their own.

Talerman declined to comment on whether Cape Cod 5 entertained multiple proposals for development. “Pennrose had worked with the town of Orleans,” he said, “and we were happy to enter into a contract to sell to them, knowing what they were going to ultimately do.”

Pennrose was also a candidate to redevelop the Governor Prence Inn in Orleans after the town purchased the property in 2021 for $2.9 million, but the company backed out in June 2024 after concerns were raised that then-affordable housing trust chair Alan McClennan had been trying to help Pennrose secure the project. McClennan resigned from his position less than a week later, apologizing for his “procedural error” in communicating with Pennrose after the company had already sent its bid to the town.

Editor’s note: Because of inaccurate information provided by the town of Orleans, an earlier version of this article, published in print on Feb. 27, incorrectly stated that the total cost of construction was $71.6 million. The correct figure is $37 million, according to Pennrose.