The Real Deal New York

Two Trees in talks for construction loan at Domino Sugar site

HFA recently nixed tax-free bond program
By Rich Bockmann | January 23, 2018 04:35PM

Rendering of 260 Kent Avenue (Credit: COOKFOX Architects)

Two Trees Management is looking for a $175 million construction loan from the state’s housing finance arm for one of the mixed-use buildings at the $3 billion Domino Sugar Factory site in Williamsburg.

The developer has applied for bond financing for the apartment-and-office building at 260 Kent Avenue, which is already under construction. The state’s Housing Finance Agency will consider the application during its meeting later this month on January 25.

“It is a priority for us to create mix of uses at Domino, and 260 Kent will bring both new residents and new workers to the neighborhood,” a Two Trees spokesperson told The Real Deal.

The 22-story office building will rise at the corner of Grand Street and Kent Avenue, with “360 degree views of Domino Park, the East River and the Manhattan and Brooklyn skylines,” the spokesperson said. The the connected 42-story residential building will have 66 affordable units.

The total development cost is pegged at $309 million, and Two Trees would put in $134 million in equity, according to the developer’s application.

The financing Two Trees is seeking from HFA will be more expensive than the kind the agency’s traditionally provided after it made a quiet change to its policies last year. The state agency stopped providing tax-exempt bonds for so-called 80/20 projects, instead shifting those resources to developments that are 100 percent affordable, as TRD originally reported.

The taxable bonds HFA would provide are benchmarked to LIBOR (the London Interbank Offered Rate) as opposed to the Securities Industry and Financial Markets Association (SIFMA) index that tax-exempt bonds are pegged to.

COOKFOX Architects designed the 462,000-square-foot building, which will include 150,000 square feet of office space and 13,000 square feet of retail.

Two Trees last year opened the first residential building on the site, the 522-unit 325 Kent, which received 87,000 applications for its 104 affordable units. The developer also signed a restaurant run by Michelin star chef Missy Robbins and the Clinton Hill-based eatery Mekelburg’s as retail tenants in the building.