Developer secures funding for $28M low-income Harlem rehab project
L + M Development Partners, a Larchmont-based firm specializing in affordable housing headed by Ron Moelis, has closed on $27.7 million in construction funding for the rehabilitation of a 120-unit affordable housing complex in Harlem at 1428 Fifth Avenue, David Dishy, executive vice president of acquisitions and investments with L + M Development, told The Real Deal.
Although the residential market is tenuous, Dishy said that the financial climate is amenable to this kind of project. Two years ago, Dishy said, his development group might have been priced out of a project similar to the one it’s undertaking.
The rehabilitation project will provide new facilities and upgrades, for the Section 8 rental building between 116th and 117th streets, including a new roof, new EnergyStar appliances and a new building-wide ventilation system to improve overall air quality, he said.
Low-income housing rehabbing is part of a larger trend in New York City toward refurbishing rather than constructing, Dishy said, as preservation becomes an increasingly attractive option to low-income housing proponents.
“The city’s focus on preservation is a function of… [getting] better bang for the buck,” Dishy said, adding that he sees it as a viable option for other metropolitan regions.
The Harlem project, expected to be completed within a year, is being funded through tax exempt bonds, equity from low-income housing credits purchased by Goldman Sachs and a $1.8 million loan from the Department of Housing Preservation and Development.
The project will create 176 construction-related jobs, according to L + M.
Adjacent to 1428 Fifth Avenue is a vacant lot, which L + M plans to use for a separate mixed-income, mixed-use development. Although it is still in the planning stages, Dishy said that the building, to be constructed on a parcel his firm purchased for $5.1 million, will include some low-income units. That project is scheduled to be complete by mid-2011.
The former owner of 1428 Fifth Avenue, Metrovest, declined to comment on the development.