By delivering 107 new affordable apartments and a much-needed grocer, La Terraza is playing a big role in revitalizing its Bronx neighborhood.
The eight-story complex is part of the rejuvenation of Melrose Commons, an area that is mounting a comeback after years of neglect.
Built on a site that was identified as critical to the area's revival, the $37 million project is a case study in environmental remediation as well as the multiple layers of financing needed to develop affordable housing.
Developers had to first tackle the unique site issues, says Tell Metzger, senior project manager at L+M Development Partners, Inc., an experienced affordable housing developer and one of four firms involved in the joint venture behind La Terraza.
The others are Procida Realty and Construction Corp., Melrose Associates, and the nonprofit We Stay/ Nos Quedamos Committee. The team was awarded the rights to develop the property by the city through a competitive process.
From the start, La Terraza proved to be complicated with an old railroad trench running through part of the property. The trench is owned by a separate party while the area above is owned and used by La Terraza. In addition, the site used to house a dry cleaner, which left the land polluted with chemicals.
Extensive remediation was performed. The effort earned a Big Apple Brownfield Award from the New York City Brownfield Partnership last year.
To finance the environmental work, developers sought brownfield tax credits from the New York State Department of Environmental Conservation, which provided roughly $4 million. It was an essential piece of the financing package, says Metzger.
In all, 10 sources of funding were assembled, including tax-exempt bonds and three separate tax credits. The bonds from the New York City Housing Development Corp. generated about $19 million.
In addition to brownfield credits, the deal utilized 4 percent federal lowincome housing tax credits from the city Department of Housing Preservation and Development and state housing tax credits from New York State Homes and Community Renewal. Bank of New York purchased the tax credits through a fund established by WNC & Associates.
“Since the implementation of the Melrose Commons Urban Renewal Plan in 2000, over 2,300 residential units have been built or are under construction,” says Kelly Henderson, senior vice president, legal affairs, at WNC. “The overarching plan is to create an attractive mixed-income, mixed-use urban village with balanced neighborhood retail, new parks, and a college campus.”
All of the units serve residents earning no more than 60 percent of the area median income, with 22 units set aside for formerly homeless.
La Terraza is also home to Foodtown, a 10,000-square-foot grocer on the ground floor. This addition is especially important to the neighborhood, which has been identified as one in need of grocers to provide healthy food options.
“La Terraza didn't just deliver on the goals of an urban renewal plan,” Metzger says. “It decontaminated a previously undevelopable city-owned site, and in the process brought in a new grocery store and community space.”