"There is no question that securing financing has become much more challenging in the current economy," Moritz says. "Credit has gotten much more expensive, tax credit pricing has gone down substantially and only the strongest affordable housing developers have the experience in this market to put together all the financial pieces required to close an affordable housing deal."
The New York City Housing Development Corp. is providing $11 million in tax-exempt bonds through its Low-Income Affordable Marketplace Program, or LAMP, and about $4.6 million in subordinate financing to Westchester 2 GP LLC, a limited-liability company owned by the Floral Park, NY-based Arker Cos.' principals. The 73,500-square-foot development--to be located at 886 Westchester Ave. in the Longwood section of the Bronx--is also receiving $7.4 million in tax credit equity from Wachovia Securities. Freddie Mac, through MMA Financial, is providing credit enhancement for a $4.1-million permanent mortgage. Bank of America is participating with a construction letter of credit in the amount of $11.1 million, and is also providing a $2.16-million loan to finance the project's 11,820-square-foot retail portion.
The residential units will be reserved for households earning up to 60% of the annual median income for New York City, according to a release. Seventeen units will be set aside for formerly homeless families and individuals. Construction is expected to start later this month and be completed in the fall of 2010.
In a statement, NYCHDC president Marc Jahr notes that his agency has provided more than $3 billion bond financing and subsidy for 219 affordable housing projects in the Bronx through the Bloomberg administration's New Housing Marketplace Plan. To date, the projects have created 25,225 apartments in the borough, according to a release. LAMP's ultimate goal is to create 165,000 affordable housing units citywide in 10 years.
Last week, NYCHDC announced the closing of a $68.5-million tax-exempt loan for another Bronx project, Bruckner by the Bridge. As with the $11 million for Hewitt House, the Bruckner by the Bridge financing utilizes private activity volume cap, which was made available under Congress' Housing and Economic Recovery Act of 2008.
To be constructed on a site that formerly contained a warehouse and adjacent parking space, the project will create 418 affordable housing units in three separate buildings bordering Bruckner Boulevard in the Morris section of the Bronx, along with 25,000 square feet of ground-floor retail space. According to a release from NYCHDC, the borrower behind the project is Manager Bruckner LLC, a single-purpose New York limited liability company owned by Peter Fine, TDF Bruckner LLC--an entity that is wholly-owned by the Doe Fund, Inc.--Marc Altheim, Touran Weissman, Sand Rad and Francesca Madruga. The developer on Bruckner by the Bridge is Atlantic Development Group.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
