CPC, Proto Close $100M Brooklyn Refi

Image by David Mark via Pixabay

The Community Preservation Corp. and Proto Property Services have received a $100 million U.S. Department of Housing and Urban Development 223(f) loan provided by Rockport Mortgage Corp. to back the refinancing of Riverdale Osborne Towers, a 525-unit affordable housing complex in the Brownsville neighborhood of Brooklyn, N.Y.

Located at 420-440 Watkins St., the property consists of four nine-story residential buildings with 525 apartments for low-income families, a preschool and 10,500 square feet of retail space, including the only full-service grocery store in the area.

The refinancing will ensure that the property remains financially stable, preserving the long-term affordability of the apartments and funding renovations to modernize the tenants’ kitchens and bathrooms.

Dan Lyons, president of Rockport Mortgage, said in a statement that the deal will extend the property’s affordability for at least the next 28 years and improve the overall quality of life for the residents.

Tell Metzger, senior vice president, equity investments at CPC, said in prepared remarks that the need for affordable homes in New York City is critical and helping to preserve and improve affordable housing stock like Riverdale Osborne Towers is as important as creating new housing.

Upgrading the Property

CPC and Proto Property Services began a $39 million renovation project upon first acquiring the project in 2007, undertaking an extensive tenant-in-place rehabilitation aimed at modernizing individual units, major building systems and the exterior and grounds of the property, as well as enhancing security.

Financing for the renovations came from a $19.4 million CPC construction loan and a $4.99 million PLP loan from the New York City Department of Housing Preservation and Development. Additional financing included $12.1 million in equity raised through the sale of 9 percent Low Income Housing Tax Credits allocated by HPD and $2.5 million in additional equity provided by CPC and its ownership partners. A permanent loan was provided by NYCRS Pension Fund with SONYMA insurance, according to information on the CPC company website.

For more than a decade before the partnership acquired Riverdale Osborne Towers, the property was plagued by crime, poor management and awful living conditions, which included rodents, gaping ceiling holes, gas leaks, trash pileups, rotting walls and non-working elevators, according to a CPC statement. Catholic Charities selected the two companies to redevelop, renovate and preserve the community as a safe, quality and affordable place to live.

CPC provides construction and permanent financing including Freddie Mac, Fannie Mae and FHA mortgages and is also an equity investor with approximately 4,200 affordable units under ownership. In November, CPC provided pre-development and other financial support through its equity investment division and long-term permanent financing to a partnership between Xenolith Partners, the Women’s Prison Association and Brownsville Partnership to develop The Rise, a $50 million, 72-unit fully affordable and supportive housing development near the intersection of East New York and Strauss Street in Brownsville.