New York City announced last week that it finalized the purchase of 30 acres of land in Queens where it will develop a 5,000-unit apartment complex largely targeted to middle-income renters.
The New York City Housing Development Corp. will likely issue recycled tax-exempt bonds on behalf of the Hunter’s Point South Development Corp., a 501(c)(3) nonprofit created by the city to develop the site, said HDC executive vice president for capital markets and general counsel Richard Froehlich.
The city announced that 60% of the housing would be set aside for middle-income households with incomes ranging from $55,000 to $158,000 for a family of four.
When the city created the 501(c)(3), it sought and received permission from the Internal Revenue Service to use tax-exempt financing for a project that didn’t have a low-income component and would serve middle-income residents, Froehlich said.
“Because it’s really in essence an arm of the government, we’re given more discretion as the government determines what’s the appropriate charitable purpose,” he said.
The financing of the project is still being developed.
“If you try to do tax-exempt financing, they can only target the populations that were approved in the 501(c)(3) application,” he said.
The project, which is expected to total in excess of $1 billion, could incorporate other tax-exempt financing vehicles.
The city bought the land from the Empire State Development Corp. and the Port Authority of New York and New Jersey for $100 million.