The source explains that the financing comes from three sources. "The major source is tax-exempt bonds. We sell bonds and use the proceeds to give mortgages to developers to build new housing and preserve existing housing. In some cases, we also provide secondary mortgages to developers from our own internal resources. And the third source is appropriations made by the Legislature and the Governor in the state budget. These appropriations go to AHC, which gives grants to developers to subsidize new construction." The source further notes that each recipient--whether it is a developer or nonprofit organization—"comes to us with a request for financing, which they determine based on the size and nature of their project and the resources they have put together from other sources."
Among the projects receiving financing are the first three multifamily 80/20 rental projects to be approved under HFA's new 2008 allocation criteria for private activity tax-exempt bond financing, also known as "volume cap." These multifamily developments must agree to set aside 20% of the units for low-income tenants and also satisfy several other criteria, including construction and finance readiness, compliance with New York City planning goals and commitment to energy efficiency.
HFA revised its 80/20 volume cap criteria in January because demand for tax-exempt bonds greatly exceeds the amount of volume cap authority available to New York State under Federal law. The bonding authority approved today will be spread over the next three years as the developments are built.
HFA also approved financing for major renovations at two Mitchell Lama projects in the city under the agency's Mitchell Lama Rehabilitation and Preservation program. Under the program, which is designed to protect Mitchell Lama tenants, owners receive renovation financing and agree to keep rents affordable for the next 40 years.
The source tells GlobeSt.com that renovation timetables for the preservation projects are determined by the owners. "We will close on our mortgage in the next month or two. In most cases, tenants are not relocated. Most renovations take place over several months and some renovations can take more than a year to be completed."
Priscilla Almodovar, president and CEO of AHC and HFA, who is in charge of fetermining which projects to finance, says in a prepared statement that "the financings we approved demonstrate the great diversity of housing in New York City. Whether it's financing market rate housing in Manhattan, providing for affordable co-ops in Brooklyn or preserving Mitchell Lama projects in Queens, 'nyhomes' is supporting the wide of variety of housing needs demanded by the city's residents."
The largest financing of Manhattan projects includes the following:
- An 80/20 project in the Hudson Yards district, at 505 W. 37th St., will receive $390 million to build two apartment towers with 835 units, of which 168 will be reserved for low-income tenants. The borrower will be Midtown West B LLC, whose principals are the principals of Rockrose Development Corp.
- The second 80/20 project in Hudson Yards, at 350 W. 37th St., will received $94.5 million in financing. The project will be a 27-story apartment house with 207 units, of which 42 will be reserved for low-income tenants. The borrower will be Tower 37 LLC, affiliate of Lalezarian Developers Inc.
The largest Brooklyn financing is for 80 DeKalb Ave, an 80/20 project in the Fort Greene neighborhood near downtown Brooklyn, which will receive $137 million in financing for a 34-story building with 365 units, of which 73 will be reserved for low-income tenants. The borrower will be FC 80 DeKalb Associates LLC, whose principals include Bruce Ratner, chairman of Forest City Ratner Cos.
The largest financing approved in Queens is for Baisley Park Gardens, a 210-unit Section 8 project at 125-30 and 120-45 Sutphin Blvd., which will receive a $20 million mortgage for major capital improvements. The project will also receive more than $1 million in annual allocations of Federal Low Income Housing Tax Credits and tax abatement from New York City. Tenants will not need to relocate during the renovations. The borrowers, Omni New York LLC and Alliant Capital Ltd., will purchase the project from the current owners as part of the financing. Section 8 subsidies will contribute to the debt service and nearly all of the units will be reserved for low-income tenants.
In the Bronx, the AHC approved a more than $2.1 million grant to the Housing Partnership Development Corp. to finance the construction of a seven-story co-op building with 62 units located at Prospect Avenue and Macy Place in the Longwood section of the Bronx.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
