Joy Construction and Maddd Equities needed eight months and three lenders, but eventually they secured $143 million in financing for a residential project in Downtown Brooklyn.
The joint venture is recapitalizing the 465-unit project at 202 Tillary Street as it prepares to go vertical. Construction began about a year ago, and the developers hope to finish the building in the third quarter of 2025.
Valley National Bank, Metropolitan Commercial Bank and Bank Leumi in Israel provided the financing. The loans replace a $30 million leasehold loan from Bank Leumi USA, which was acquired by Valley National last year.
Joy’s Eli Weiss said the number of lenders for the modest-sized loan package and the length of time it took to secure it underscore the difficulty developers face in financing ground-up projects.
“There’s still such a challenge to get deals done,” he said.
Other sources of financing include the proceeds from the sale of the site’s ground lease to iStar in 2021 for $33.2 million. The joint venture controls the property through a leaseback agreement.
The project qualifies for the property tax break 421a, as it got foundation footings in place ahead of the program’s expiration last June. Its scheduled completion date is ahead of the 2026 deadline to receive the 35-year tax break.
The joint venture won new zoning for the site, triggering the city’s Mandatory Inclusionary Housing program. To comply, one quarter of the project’s apartments will be reserved for tenants earning up to 60 percent of the area median income.
The developers also purchased 180,000 square feet of air rights from Ingersoll Houses, a nearby New York City Housing Authority development, to increase the project’s size.
The developers acquired the site in 2018 for $30 million.
Joy and Maddd are frequent partners on affordable housing projects. Laborers union Local 79, which has been trying to gain market share in affordable housing construction, planned to protest outside Joy’s Lower Manhattan office Thursday.
The union wants city subsidies for such projects to require more safety measures on job sites, which would shift some of them to union labor. It cited a half dozen deaths at projects the union described as being “associated with” Joy since 2006.
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