Hudson Companies plans to seek an infusion of Chinese capital in the form of EB-5 for its Brooklyn Heights library redevelopment project, which includes a 36-story condominium tower.
The David Kramer-led development firm is planning to raise up to $110 million for the project through the popular immigration program, which awards foreign investors a U.S. green card in exchange for $500,000. The funds will be used toward the construction of a 139-unit condo tower with a 27,000-square-foot library branch at the base, as well as two new rental buildings housing a combined 114 affordable units, Kramer told The Real Deal. The development’s address will be 1 Clinton Street.
Hudson tapped the U.S. Immigration Fund, headed by Nicholas Mastroianni, to raise the funds.
“From a developer’s standpoint, EB-5 has better rates of return,” Kramer said, referring to the relatively low interest rates paid to EB-5 investors. He added that EB-5 doesn’t work for every project, since it generally takes longer to syndicate investor funds than, say, a traditional bank loan. “For a project like this – with a long ULURP process – it made sense for us to pursue it.”
Hudson is paying $52 million for the library site at 280 Cadman Plaza West, after the city’s Economic Development Corp. selected the developer’s bid to redevelop the aging property.
But the project has faced several road bumps.
A recent report in the New York Post alleged the de Blasio administration granted Hudson a sweetheart deal – a claim that City Hall and the Brooklyn Public Library staunchly denied. “There’s no question this was the best package,” a spokesperson for the city said at the time.
Last month, it was reported that critics of the plan had filed a complaint with the attorney general, alleging that the Brooklyn Public Library has been “feigning capital poverty.” In reality, the library has north of $100 million in unspent funds, according to a suit filed by a group called Love Brooklyn Libraries.
Hudson and partner Related Companies are close to a deal for a $105 million construction loan for its Passive House apartment building on the new Cornell Tech campus on Roosevelt Island.