Company invested millions in the Fulton Street housing and retail development
Goldman Sachs Chairman Lloyd Blankfein joined BRP Development and a host of city and local officials to break ground on the Bradford, a $45 million housing and retail development in Bedford Stuyvesant that was financed using a combination of government tax credits, private investment funds and tax exempt bonds.
Yesterday’s groundbreaking of the 105-unit affordable rental building, at 1560-1576 Fulton Street, was announced after more than five years of sitting in the pipeline, officials said. Originally being conceived as an affordable condominium, the Bradford was financed by combining funds from the city department of Housing and Preservation Development for the first time with New Markets Tax Credits.
Goldman Sachs gave $6 million in direct equity and predevelopment costs, a $17.1 million bridge loan, a $20.9 million credit enhancement on tax exempt bonds and $6.5 million in New Markets Tax Credit equity.
Geoff Flournoy, managing director and co-founder of BRP Development, said Goldman Sachs’ involvement was critical in getting the deal done at a time when few new housing developments are getting off the ground.
“They turned a very difficult transaction into one that made sense [for Bedford Stuyvesant],” Flournoy said.
Deborah Wright, CEO of Carver National Bank, said she contacted Goldman Sachs and allowed the investment firm to use her bank’s New Markets Tax Credit to finance the deal. The credit is a federal program that offers private investors a 39 percent credit when they invest in a low income neighborhood.
“We’re finding people that aren’t just guided by profit but have a real passion for their communities,” Blankfein said.
Goldman and BRP announced the partnership in 2008 with plans by the Wall Street firm to invest $20 million in three mixed-income projects, or 200 condo and rental units and 16,000 square feet of retail space in Harlem and Bedford Stuyvesant.
Goldman has invested more than $1 billion in urban investments, including a September deal to invest $23 million into an affordable housing fund with developer Jonathan Rose and $11 million in a stalled waterfront project in Williamsburg.
The city’s Housing Development Corp. issued $20.7 million in tax exempt bonds for construction financing and $6.8 million in subsidies from its reserves for the Bradford. The city’s Housing Preservation Development provided $4.38 million in city capital funds, $1.9 million in HOME funds and $1 million in HTF funds. Goldman provided the equity funding to back up the HPD bonds and provided an additional $6.5 million in equity under the New Markets Tax Credit program. The HOME funds program provides money for cities that partner with local non-profit groups.
The building’s 9,700 square feet of ground-floor retail space will be reserved for small businesses.