Rockport provides $110M in financing for East Harlem complex converted to Section 8

Building was at risk to lose affordability status

TRD New York /
Dec.December 28, 2018 03:45 PM

Charlie Gendron of LIHC Investment Group and 1250 Fifth Avenue (Credit: Google Maps)

Charlie Gendron’s LIHC Investment Group secured a $110 million mortgage from Rockport Mortgage to refinance East Harlem’s Lakeview Apartments, a low-income housing complex that recently exited the Mitchell Lama-program but will remain affordable under Section 8 guidelines.

The financing, according to a public filing recorded Friday with New York City’s Department of Finance, includes about $108.4 million to refinance existing debt, and about $1.6 million for a building loan.

Commercial Observer first reported the financing news.

Rockport Mortgage Corporation is the lender on the $110 million loan through HUD, and Red Capital Group is the servicer on the loan, according to Kelly Magee, LIHC’s spokesperson.

The refinancing is part of a recent agreement to keep the 446-unit complex, built in 1974 as part of the Mitchell-Lama program, affordable.

The complex, which sits at the corner of Fifth Avenue and 106th Street across from Central Park, was set to exit the program, meaning it would have lost its rent restrictions.

But in a deal with state, federal and city officials announced in September, the units will continue to be rented at below-market rates for the next 40 years. The vast majority of the apartments were converted to federal Section 8 status to preserve their affordability and the remaining units, should they become vacant, will be rented to those with no more than 110 percent of the area median income.

The complex’s Mitchell-Lama status was dissolved and LIHC, which already has made repairs at the site, will continue to fix up the complex and its units.

Cuomo administration aides told the New York Daily News at the time of the announcement that the state also would refinance $14 million of LIHC’s outstanding debt at lower interest rates and the city would provide real estate tax relief.

Update: This article and its headline were corrected to indicate that the complex’s Mitchell-Lama status already has dissolved, that LIHC has made some repairs, and that the complex already has been converted to Section 8 status.

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