Nearly $160 million has been raised to preserve the Michelangelo Apartments, a 494-unit affordable housing development in New York City.
Located in the Melrose section of the Bronx, the 43-year-old Mitchell-Lama development will be renovated and preserved as affordable housing for an additional 40 years through the federal Rental Assistance Demonstration (RAD) program.
“With the cost of living in New York City rising each year, developments like Michelangelo Apartments serve as a safe haven from the threats of displacement in a rapidly gentrifying area,” said developer Michael T. Rooney Sr., principal of developer MDG Design + Construction. MDG owns the project along with Cary Fields.
The Department of Housing and Urban Development’s RAD program enables Mitchell-Lama and other eligible housing to remain in the affordable housing stock and receive the necessary repairs to ensure a quality home for low-income residents, according to Rooney.
The project is part of the Gov. Andrew Cuomo’s $1 billion House NY initiative to transform 8,600 aging state-financed Mitchell-Lama apartments in critical need of repairs and upgrades into quality, safe homes by 2018.
New York State Homes and Community Renewal (HCR) has financed more than $1.9 billion in total development costs under RAD, preserving the affordability of more than 8,470 units, said state officials. That includes 6,928 units of critical middle-income Mitchell-Lama housing stock and 1,542 New York City Housing Authority and other public housing units across the state.
Michelangelo Apartments was built in 1974 using a HUD Sec. 236 loan guarantee. It contains four towers (one 27-story tower, one 12-story tower, and two 11-story towers), with 80 studio, 126 one-bedroom, 191 two-bedroom, 77 three-bedroom, and 20 four-bedroom apartments with 50,000 square feet of retail space and underground parking.
Michelangelo Apartments will be renovated with the tenants in place. The improvements will include full kitchen and bathroom renovations, conversion to an energy-efficient hydronic boiler system from electric heaters, elevator modernization, facade repairs, lobby modernization, public hall beautification, conversion to energy-efficient LED lighting throughout the building, and landscaping improvements.
HCR is providing $82.5 million in tax-exempt bond financing, which will finance a $39.3 million permanent loan, a $9.5 million IRP loan, and a $33.7 million short-term construction loan from Citi Community Capital in its role as a Fannie Mae Delegated Underwriting and Servicing lender.
In addition, Citi is providing $44.1 million in tax credit equity, which was arranged by Raymond James Tax Credit Funds, and a $33.7 million rehabilitation period bridge loan. Through RAD, Michelangelo Apartments will receive project-based rental assistance contracts for 406 units, and 66 additional units will house eligible tenants who previously had portable Sec. 8 vouchers. The new Sec. 8 contract guarantees the affordability of the development.
