$172M Rehab of Two Former Slum Properties Completed
In 2018, the U.S. Department of Housing and Urban Development) took action against the previous owner of the housing complexes, declaring them an absentee landlord and requiring them to pay $800,000 in civil penalties for failing to provide decent, safe, and sanitary housing conditions to residents.
NEWARK, NJ—Federal, state and city officials gathered on Thursday to celebrate the completion of the $172-million rehabilitation of the former dilapidated Garden Spires and Spruce Spires affordable housing communities in Newark.
The rehabilitation, which was funded largely by the State of New Jersey, was completed by Omni America, LLC and addressed all past building and fire code violations and has improved the quality of life for the more than 650 households who live in the housing complexes, state officials noted.
“Today’s ribbon cutting of the fully renovated Garden and Spruce Spires shows what collaboration among government agencies and the private sector can accomplish when everyone is working toward a common purpose, said Acting Governor Sheila Y. Oliver, who serves as commissioner of the New Jersey Department of Community Affairs. She later added, “These improvements do more than abate safety violations and property decay; they show that every person is deserving of human dignity, which includes living in clean and decent housing they can be proud to call home.”
Both housing complexes had amassed more than 2,700 state fire and building code violations cited by DCA. The City of Newark helped change the future of the two housing communities by conducting unannounced building inspections in 2015, citing the previous owner for violations, and suing the previous owner when they failed to make repairs. The city also led the effort to find a developer willing to completely renovate the properties and preserve them as affordable housing.
In 2018, the U.S. Department of Housing and Urban Development) took action against the previous owner of the housing complexes, declaring them an absentee landlord and requiring them to pay $800,000 in civil penalties for failing to provide decent, safe, and sanitary housing conditions to residents. HUD provides project-based Section 8 rental assistance for 350 units at Garden Spires and 112 units at Spruce Spires.
“For the last two years, this administration has driven efforts and worked diligently with public and private partners to rehabilitate the Garden Spires and Spruce Spires apartment complexes, which had become nearly uninhabitable to their tenants, a public health hazard to our community, and a serious public safety threat,” said Newark Mayor Ras J. Baraka. “Today we can report to our city in general and to the 650 households of these buildings in particular, that after 18 months, the properties have been restored.”
Mayor Baraka, Lt. Gov. Oliver, and former American League All-Star and Most Valuable Player Mo Vaughn, a managing principal of the New York-based Omni affordable housing development firm, announced the more than $172-million project on Sept. 5, 2018 after it acquired the two properties.
State funds provided by the New Jersey Housing and Mortgage Finance Agency (NJHMFA) and New Jersey Economic Development Authority (NJEDA) to the property owner were used for extensive interior and exterior renovations, which included new roofs, flooring and lighting; new kitchen cabinets, appliances and fixtures; new bathroom vanities, sinks, and bath enclosures; and new building mechanical systems including hot water heaters, boilers and electrical panels, as well as a cogeneration system at Garden Spires. A 30-year tax abatement by the City of Newark and the city’s acceptance of lowered PILOT payments helped make the project viable.
No tenants were displaced during the rehabilitation project, which began in the fall of 2018 and took 18 months to complete.
Garden Spires, which was built in 1963, consists of two 20-story buildings located on First Street adjacent to Route 280 that provide 544 apartments for families. NJHMFA contributed $59.4 million in financing from its Conduit Bond program to the $135.3 million rehabilitation project for Garden Spires. In addition to the previously stated improvements, work also included repaving the parking lot, repairing sidewalks and walkways, adding community rooms and laundry facilities, and upgrading the security alarm system, including the installation of about 400 DVR surveillance cameras.
Spruce Spires, which was built in 1920, has 112 apartments spread across four four-story buildings and one five-story building located on Spruce Street and Martin Luther King Boulevard. NJHMFA awarded $16.3 million in financing from the Conduit Bond program for the $37.3 million rehabilitation project for Spruce Spires. Work also included the repair of sidewalks and walkways, upgrades to the security alarm system, and the installation of approximately 100 DVR surveillance cameras.
In addition to financing from the Conduit Bond program, Omni America, LLC also received from NJHMFA 4% Low Income Housing Tax Credits, which provided the Garden and Spruce Spires projects with $49.1 million in private equity.