Assembly Okays Starrett City Refinancing

NEW YORK CITY-Starrett City’s owners can refinance the Brooklyn apartment complex and keep it in the Mitchell-Lama housing subsidy program for 30 more years under a bill passed Monday afternoon by the New York State Assembly. The measure must still be voted on by the State Senate, which Gov. David Paterson has ordered into special session following two weeks of a deadlock over the chamber’s leadership.

A spokesman for Starrett City Associates, the investors group which owns the 46-building, 5,881-unit complex, tells GlobeSt.com, “This is something we’ve worked on for some time. We’ve always intended to preserve Starrett City as affordable housing, and this is another way to do it.” In recent years, the owners had sought a buyer for Starrett City, but took it off the market in February after a series of deals fell through. At the height of the market, Starrett City Associates hoped to get more than $1 billion for the 153-acre complex.

Under the provisions of Assembly bill A-8838, Starrett City Associates may refinance the complex in excess of its actual project cost, provided that the group complies with Mitchell-Lama guidelines for 30 more years and does not increase rents to pay for “any subsequent debt produced by the project.” The bill creates a $40-million dedicated fund for capital improvements to the residential tower structures and to individual units, which comes out of the loan proceeds.