GLENS FALLS, N.Y. On Aug. 16, workers began tearing down the Henry Hudson Apartments, ripping the roof off a nearly 40- year-old townhouse with a bulldozer.
Evergreen Partners, LLC, and Marathon Development Group, Ltd., plan to keep federal subsidies flowing to the old affordable housing project even as they demolish the buildings. They plan to build 136 new townhouse apartments, all reserved for low-income households and subsidized with project-based Sec. 8 vouchers, to replace 136 crumbling apartments originally built in 1973 under the Sec. 236 program administered by the Department of Housing and Urban Development (HUD).
That’s unusual: Preserving affordable housing usually means fixing up old apartments to keep a stream of HUD subsidies flowing.
But the apartments at Henry Hudson were too tattered to be physically preserved. Shoddy insulation, inefficient electric heating, and decades of less than attentive management plagued Henry Hudson. “No amount of renovation would make it a good place to live or a good property to own,” said Charlie Allen, a principal with Evergreen.
The demolition didn’t need HUD’s approval, because all the original apartments would be replaced. It just took a lot of money. In 2006, the developers won an enormous $20 million reservation of lowincome housing tax credits—four times larger than the median tax credit award in New York state in 2006.
With this tax credit reservation, the developers thought they’d cleared their biggest hurdle, Allen said. But the trouble had only just begun.
Many in Glens Falls did not want the project rebuilt on its original site just outside of downtown. In early 2006, they elected a new mayor, LeRoy B. Akins Jr., who demanded that the redevelopment locate some of its new apartments on the site of an underutilized park. Other planning officials refused to allow even that. The project was delayed for more than a year.
Opponents seemed to be waiting for HUD to foreclose on the property, which had failed several HUD inspections and owed the agency $110,000 in overdue mortgage payments. “We had those that thought that if we ignored this problem, it would just go away,” remembered Tom Donahue, community development director for the city of Glens Falls.
HUD officials saved the project with their support, Allen said, giving Evergreen and Marathon extra time to put their deal together. HUD also made it clear to local officials that even if HUD foreclosed, the agency would only sell Henry Hudson to a buyer that would keep the apartments affordable. “They were not going to lose these 136 apartments,” Donahue said.
Planning officials finally allowed the redevelopment of all 136 apartments on the original site to begin in August after delays added nearly $1 million to the project costs, including $750,000 in extra financing costs.
The developers will pay for the $29.6 million redevelopment with $19.5 million in equity from the sale of tax credits to First Sterling Financial, Inc. The New York Housing Finance Agency provided a $3.4 million, 30-year loan. The housing finance agency and the New York State Division of Housing and Community Renewal also provided $4.3 million in soft financing. Another $1.8 million came from the deferral of the developers’ $3.6 million fee.
Local officials have become enthusiastic as construction proceeds and a new property management team has made the property a safer place to live, said Donahue. “This is going to be a real nice addition.”