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New York City Housing Development Corporation Directors Approve First Ever Recycled Bonds For Two Developments

NEW YORK, NY – April 21, 2009 – (RealEstateRama) — The New York City Housing Development Corporation (HDC) Board of Directors today welcomed NYC Department of Housing Preservation and Development Commissioner Rafael E. Cestero as the new HDC Board Chairman and at the meeting approved the nation’s first “recycled” bonds for affordable housing projects in the Bronx and Staten Island. The Board also approved $72 million in tax-exempt Multi-family Housing Revenue Bonds, of which $58 million are recycled bonds, for other eligible projects expected to close in the second half of 2009.

The recycled bonds were issued in accordance with the Federal Housing and Economic Recovery Act of 2008 (HERA) which allows for the refunding of tax-exempt multifamily housing bonds and using the refunding proceeds to finance new development activity without having to use new private activity bond cap. Under the law, housing agencies such as HDC have six months to make a loan from recycled bonds. Over the course of the next several years, HDC anticipates benefitting from as much as $600 million in recycled bond capacity.

HDC Chairman Cestero said: “I am pleased to take on this new role as Chairman of the nation’s number one issuer of multifamily housing bonds. HPD and HDC have a strong, symbiotic relationship that I fully expect to grow for the good of our neighborhoods and our neighbors, in service of Mayor Michael R. Bloomberg’s New Housing Marketplace Plan to produce or preserve 165,000 affordable homes for 500,000 New Yorkers.” By statute, the City’s HPD Commissioner also serves as HDC Chair.

HDC President Marc Jahr said: “HDC has long been the leader in affordable housing finance. I am proud of the spirit of innovation that has become our hallmark. We pushed last year – with the invaluable assistance of Senator Schumer and Representative Rangel – to secure the ability to recycle refunded bonds and put them back into productive use for affordable housing development. The Board’s action today solidifies our reputation as the pace setter – HDC is the first in the nation to put recycled bonds into service for the greater good of the City of New York and its neighborhoods.”

St Ann’s Terrace, located in the Melrose section of the Bronx, will be built in two phases on a site owned by the developer—Jackson Development Group—bounded by St. Ann’s Avenue, East 156th Street, Eagle Avenue and East 159th Street. The first phase consists of six newly constructed buildings containing a total of 480 units. Of these, 340 will be available to low-income families making 60% Annual Median Income (AMI) or $46,080 for a family of four, with 95 of those units reserved for formerly homeless tenants. Another 122 will be set aside for families earning from 80% to 100% AMI ($61,440 – $76,800/yr for a family of four.) The HDC Board authorized a total of $79 million in tax-exempt bonds to provide construction and permanent financing. Three of the buildings will use $27 million in recycled tax-exempt bonds and the other three buildings will use $52 million in Private Activity Bond Volume Cap. In addition to the residential portion, the development is expected to contain approximately 50,000-square-feet of ground floor retail space in the residential buildings and underground parking with 176 spaces available. The second phase of construction envisions two additional buildings with about 140 residential units, both rental and ownership, and 224 parking spaces. Taken as a whole, the development will provide an enormous boost to the ongoing revival of the South Bronx.

In Staten Island, the Board approved $13.5 million in Private Activity Bond Volume Cap and $6.5 million in recycled bonds for the construction of senior citizen housing on Broad Street in Stapleton. The project, to be built in collaboration with the NYC Housing Authority on land that they own, is proposed as an eight-story elevator building containing 105-unit low-income rental homes for seniors with incomes no higher than 60% AMI. The project is expected to include 33 parking spaces. The developers are BFC, in partnership with not-for-profit Housing Partnership Development Corporation.

The directors approved issuing approximately $14 million in tax-exempt bonds, subject to the Private Activity Bond Volume Cap, to construct 2264 Morris Avenue, an 11-story newly constructed rental building, with 88 units: 27 studios; 14 one-bedroom units; 47 two-bedroom units; and community space. All of the units are to be rented to households earning not more than 60% of the New York City area median income. The developer is Atlantic Development.

The New York City Housing Development Corporation (HDC) provides a variety of financing programs for the creation and preservation of multi-family housing that meets the wide range of affordable housing needs of the City’s economically diverse population.
HDC is implementing Mayor Bloomberg’s New Housing Marketplace Plan to build and preserve 165,000 units of affordable housing for 500,000 New Yorkers. The New Housing Marketplace Plan is the largest municipal affordable housing effort in the nation’s history.

Christina Sanchez (HDC), (212)-227-2644, csanchez (at) nychdc (dot) com