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Wednesday, January 16, 2019

Developer Hudson Related Begins Construction On Roosevelt Island Riverwalk Building 8 Affordable Housing With 341 Units - Will Roosevelt Island Residents Receive Preference For Housing Lottery?

As reported last November, the Roosevelt Island Operating Corp (RIOC) Board of Directors agreed to enter into a ground lease with Hudson Related to develop Riverwalk Building 8 as a 341 unit affordable housing development in Southtown:

... BUILDING 8 GROUND LEASE TERMS

Under the Building 8 Ground Lease (i) 3% of the 341 units will be reserved as Homeless Units, (ii) 3% of the units will be reserved for very low-income families with household incomes of 40% of AMI, (iii) 14% of the units will be reserved for families with household incomes of 50% of AMI, (iv) 10% of the units will be reserved for families with household incomes of 80% of AMI, (v) 20% of the units will be reserved for families with household incomes of 100% of AMI, and (vi) 50% of the units will be reserved for families with household incomes of 130% of AMI. This breakdown provides an even greater degree of affordability than was set forth in the Fifth Amendment....
Construction on the Riverwalk building 8 began this week.
Some Roosevelt Island residents will lose their unobstructed waterfront views



and Roosevelt Island kids will lose a beloved sledding hill.



According to the RIOC:
The Roosevelt Island Operating Corporation (RIOC) has executed a ground lease agreement with the developers – the Hudson Companies Inc. and the Related Companies LLP. - for Southtown Building 8 that will bring 341 units of additional affordable housing to Roosevelt Island by 2021.

At a special session convened November 20, RIOC’s Board of Directors - after reviewing the deal’s proposed structure - voted to allow RIOC President and CEO Susan Rosenthal approval to negotiate and execute a final ground lease with the Hudson Related Companies for Building 8, a planned 21-story building comprised of approximately 240,000 square feet of floor area, on the plot just south of 480 Main Street. The building will be designed by Handel Architects who also designed the Southtown 7 building.

In a negotiation during the special session, Hudson Related also agreed to construct a comfort station at the Island’s Firefighters Field and make modifications to the field up to a cost of $1 million.

Sixty percent of the units in Southtown 8 will be permanently affordable. The other 40 percent of the units will be income restricted and or affordable for at least 40 years from permanent loan conversion.

“The Southtown 8 ground lease will allow RIOC to continue honoring its mission, as laid out in the Island’s General Development Plan; to promote, develop and maintain an affordable mixed-use residential community,” here on the Island, said RIOC President Susan Rosenthal. Of the current 5,226 units already built on Roosevelt Island, 2,200 remain affordable, according to RIOC’s 2018 Performance Measure Report.

The Southtown 8 building will be financed under M2 Mixed Income programs through the Department of Housing Preservation and Development of the City of New York (HPD) and the New York City Housing Development Corporation (HDC).

Other provisions in the deal include:
  1. On the date of closing, December 26, 2018, the developer paid RIOC $288,000, the first annual payment of ground rent.
  2. At the beginning of the Rent Commencement Date, (or the end of construction), the developer’s annual ground rent will be $576,000 and increase three percent each year.
  3. A one-time rental payment of $16,800,000 is also due at the beginning of the rental period, but can be deferred up to 36 months at a four percent interest rate.
 The apartment quantity by size in Southtown Building 8 is broken down as follows:
  • 81 - studio
  • 158 - 1BR
  • 51 - 2 BR
  • 50 - 3 BR
Depending on family and apartment size, income-level based rents (calculated based on the AMI) will vary from a minimum of $505 a month for a studio; to $3,431 for a three-bedroom.

The City requires that the new building provide a 50 percent preference for residents of Community Board 8’s jurisdiction which includes Roosevelt Island.

When marketing and leasing starts, residential applications will be submitted to a “housing lottery” via the NYC Housing Connect website which is administered by the city’s HPD.
Will Roosevelt Island residents get preference for the Riverwalk Building 8 housing lottery.

During the November 7 RIOC Real Estate Advisory Committee meeting, Hudson Related developer David Kramer said he would love to give Roosevelt Island residents a preference  for the affordable units but the NYC Housing Preservation Department, which is providing project financing said the preference is for entire Community Board 8 and not limited to Roosevelt Island residents.



But I asked RIOC Board Directors and President Susan Rosenthal:
As you know, during the November 7 RIOC Real Estate Development Advisory Committee meeting (see post here), RIOC President Susan Rosenthal asked Hudson Related developer David Kramer about providing  Roosevelt Island residents with preference for obtaining housing in the new Riverwalk 8 Affordable Housing building soon to start construction. Susan asked David if it would help for RIOC to insist that such a provision be in the agreement.

David replied that he was told by the NYC Financing Authorities that the preference applied to Community Board 8 residents, which included Roosevelt Island, but could not be restricted to Roosevelt Island residents.

However, according to the NYC Housing Connect web site (HPD & HDC) FAQ about Affordable Housing Preferences:
The City is committed to widening opportunities for affordable housing for all New Yorkers. Please note that all applicants, regardless of preference, must meet the income, employment, and other eligibility criteria set for each property for which they are applying.
Preference is given to applicants that meet one or more of the following criteria:
  1. Persons with Mobility, Hearing, and/or Vision Disabilities

    Federal disability statutes give preference to five percent (5%) of units for households applicants with a household member who has a mobility disability. Another two percent (2%) of units receive preference for households with a household member who has a hearing or visual disability.
  2. Current Community Board Residents (CB)

    Current residents of the community board in which the property is located receive a preference for fifty percent (50%) of the units. The community preference was established to provide greater housing opportunities for long-time residents of New York City neighborhoods where HPD/HDC have made a significant investment in housing. To find what CB you live in, visit: http://www.nyc.gov/html/cau/html/cb/cb.shtml.
  3. Municipal Employees

    The City recognizes that many New York City municipal employees are required to live within the five boroughs and can often find it very difficult to obtain affordable housing. The municipal preference makes five percent (5%) of the units in HPD- or HDC-financed developments available to current municipal employees. Down Payment Assistance for homeownership applicants is also available. HPD/HDC will also work with its partners to provide homeownership counseling and education to municipal employees interested in becoming homeowners.

    Nearly all New York City employees are eligible for the preference. For a list of eligible Agencies, visit:http://www.nyc.gov/html/hpd/html/apartment/faqs-municipal-employees.shtml#agencies. Employees will be screened to ensure that no conflict of interest exists. If you are unsure whether you may have a conflict of interest, check with your agency.
  4. Project-specific Preferences

    As part of the agreements set forth for a specific development, additional preferences may apply. Such preferences may include, but are not limited to, preferences for Senior Citizens or Veterans. Any such preference would be specified in the advertisement for the project
Paragraph 4 allows Project Specific Preferences and is not limited to community board residents, Senior Citizens, Veterans, municipal employees etc. This may allow for a Roosevelt Island resident preference for Riverwalk Building 8.

Here is an example of a NYC affordable housing development in Chelsea that has a preference for NYC Housing Authority (NYCHA) residents. If NYCHA residents are permitted a preference for the Chelsea building under NYC affordable housing program, why not a Roosevelt Island residents preference for Riverwalk Building 8?

Will RIOC revisit this issue of preferences for Roosevelt Island residents with Hudson Related and inquire with appropriate authorities if it is possible?
The Real Deal reports on the Hudson Related Rivewalk affordable housing building financing today:
... The New York City Department of Housing Preservation and Development provided a $20.29 million permanent subsidy loan, while the New York City Housing Development Corporation gave $12.9 million in tax-exempt bonds. The New York State HCR through its Homes for Working Families program loaned $12.5 million.

Meanwhile, Citi provided a $74.6 million construction loan and letter of credit for the tax-exempt bonds as well as a $3 million subsidy loan. The bank also committed to buying the tax credits from the project’s tax credit syndicator, WNC.

In a statement, Citi’s Tricia Yarger called the financing structure for the project “complex.”...
Will update when more info available on Riverwalk Building 8 preferences for Roosevelt Island residents. Stay tuned.

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