Eliminating the Risk of Converting Affordable Housing Units to Market Rate in New York City
Five Apartment Complexes Towers Will Receive a $12 Million Rehabilitation
Preservation Development Partners, a joint venture of developers Francine Kellman, Brian Raddock, Donald Capoccia, Joseph Ferrara and Brandon Baron, announced today the acquisition and rehabilitation of The Leggett Avenue Properties, a portfolio of five multifamily apartment complexes in the Bronx and Brooklyn.
The portfolio comprises 324 apartments which include 2 studios, 132 one bedrooms, 145 two bedrooms and 41 three bedrooms. Also, there are 4 superintendent units, 2 commercial spaces and 2 antenna leases.
All of the properties are fully occupied and currently benefit from Project Based Section 8 Contracts (HAP Contracts). The Section 8 Contract, which subsidizes tenants’ rental payments, will be renewed and will protect the apartments against conversion to market rate housing for at least the next 20 years. All units will be set-aside for tenants earning no more than 60% of “AMI” (Area Median Income).
In addition, Preservation Development Partners will invest more than $12 million, or approximately $40,000 per unit, to complete a major rehabilitation of the buildings. The new owner will repair and install of new roofs, trash compactors, flooring, and facades. Individual units will be upgraded with new kitchens, including new cabinets, counter tops, and stainless steel sinks. The bathrooms will have new toilets, sinks, vanities, and shower bodies installed.
Construction is expected to be completed in summer 2017.
Francine Kellman, PDP Principal, said, “All rehabilitation work will be done with the tenants still in place, avoiding any unnecessary relocation costs that are typically associated with work of this caliber. Upon completion of the scheduled rehabilitation work the project will provide comparable or better quality housing than other housing in the market area.”
Brian Raddock, PDP Principal, said, “The purchase and rehabilitation of the Leggett Avenue Properties through the use of tax-credit equity and the benefit of Section 8 subsidies will eliminate the risk of 324 affordable housing units in Bronx County and Kings County, NY from converting to market rate units. With a limited supply of affordable housing in the New York City area and very high demand for housing in general in the region, this project will provide a long-term benefit to the community.”
The Leggett Avenue Properties’ acquisition by Preservation Development Partners was financed with tax-exempt bonds, credit enhanced by Freddie Mac through its LIHTC Mod Rehab program. The project will also be capitalized with equity from an investor in the project’s “4%” low income housing tax credits.
The seller was not disclosed.
The portfolio includes five apartment complexes:
972 Leggett Avenue, Bronx
820 Jackson Avenue, Bronx
60-68 West 162nd Street, Bronx
953 Anderson Avenue, Bronx
951 Woodycrest Avenue, Bronx
286-290 East 91st Street, Brooklyn
185 East 92nd Street, Brooklyn
Preservation Development Partners is a partnership formed by K&R Preservation and BFC Partners. K&R is owned and operated by its principals Francine Kellman and Brian Raddock. Since the inception of Preservation Development Partners the company has purchased and rehabilitated 8 different properties, in New York City, Spring Valley, New York and East Orange, New Jersey totaling 2,411 low-income units. Properties in the portfolio include the East River Apartments, a 179-unit multifamily apartment complex in East Harlem, Albert Goodman Plaza, a 252-unit rental complex and four-building property located in The Bronx, the Surrey Carlton Apartments, a 176-unit rental complex located in Spring Valley, New York, Trinity Apartments, a 75-unit multifamily complex located at 2105 Daly Avenue in the Bronx, Sinclair Houses, an 81-unit rental complex located at 502 and 528 West 151st Street in the Hamilton Heights section of Manhattan, North Shore Plaza, a 536-unit multifamily Project in Staten Island located at 35 Holland Avenue, a 876-unit NYCHA Portfolio scattered throughout the Bronx, Brooklyn and Manhattan and a 236-unit senior living complex called Oakwood Towers in Essex County, NJ located at 400