WinnResidential and WHA Team on $16.8M Renovation of Morris Heights Affordable Housing
- Oct 15, 2013
New York—WinnResidential, in partnership with the Workforce Housing Advisors and Community Preservation Corporation, has completed a $16.8 million renovation of 1520 Sedgwick Ave., in the Bronx’s Morris Heights neighborhood.
The former at-risk property is known as the “birthplace of hip-hop,” with the first-ever hip-hop party said to have taken place in the building’s rec room in 1973, organized by DJ Kool Herc and his sister Cindy Campbell.
The affordable housing building is a former Mitchell-Lama property that succumbed to a cycle of speculative ownership and fell into financial and physical distress.
“HDC is committed to preserving the City’s Mitchell-Lama housing stock, which is both essential, irreplaceable affordable housing and a critical element in maintaining neighborhood stability,” Marc Jahr, NYC Housing Development Corporation’s president, says. “It was a first for us and evidence of HDC’s ability to work nimbly and prudently to support the efforts of a capable developer to recapture a development that had been lost from public oversight and appeared to be sliding into great disrepair.”
The 1520 Sedgwick building was originally purchased out of the Mitchell-Lama affordability program in 2008 by an owner who was looking to remove the residents and resell the property. Efforts by WinnResidential, WHFA and city officials allowed WinnResidential and WHFA to purchase the mortgage note and take the property, to keep rents affordable.
The building was rehabilitated under Mayor Michael Bloomberg’s New Housing Marketplace Plan, a multibillion dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of the 2014 fiscal year.
The extensive rehabilitation work included installing new elevator cabs, bathroom and kitchen upgrades, new flooring and painting in each unit, replacement and upgrading of building mechanics including a new heating and ventilation system, electrical upgrades, installation of a new roof, new building doors, window repairs, upgrading of the lobby and common spaces, extensive masonry work and installation of a closed circuit security system.
The $16.8 million funding was provided by a loan from HPD for $4.5 million from the third round of the federal Neighborhood Stabilization Program and $1.6 million from the 421a fund. The CPC provided a $6.8 million loan. The NYC Comptroller’s office on behalf of the NYC Pension Funds, committed a $6.8 million 30-year mortgage to take out CPC’s construction loan. The City Council provided $3 million in Reso A funding. More than $880,000 was contributed in developer equity.
Support from DJ Kool Herc, elected officials, and the City, combined with innovative financing from CPC, Morgan Stanley, HDC and HPD helped WFHA make the needed repairs on the 102-unit property.
Existing tenants currently have rents that are affordable to households with incomes ranging between 60-70 percent Area Median Income, which is equivalent to $49,800 and $58,100 respectively for a family of four.