The New York City Housing Development Corp. yesterday approved plans to issue $232 million in taxable and tax-exempt bonds within the next month to build or rehabilitate 552 apartments in the Bronx, Brooklyn, and downtown Manhattan.
The bulk of the bonds, $210 million, will finance the conversion of a 56-story skyscraper from offices to 366 apartments under the Liberty bond program enacted by the federal government after the attacks of Sept. 11, 2001, to stimulate the redevelopment of lower Manhattan.
The development, at 20 Exchange Place, will not be designated affordable housing, but a $4.23 million development fee paid by the developer, RBNB 20 Owner LLC, will be used for affordable housing throughout the city, according to HDC spokesman Aaron Donovan. That will translate to construction or preservation of about 94 affordable apartments, he said.
Goldman, Sachs & Co. will be underwriter for the bonds. Pricing is scheduled for June 7. The bond issue will be about 70% taxable, with $66.4 million tax-exempt. The German bank Landesbank Hessen-Thüringen Girozentrale, known as Helaba, will provide a letter of credit, said HDC general counsel Richard Froehlich. The project carries a long-term rating of A from Standard & Poor’s, and a short-term rating of A1, he said.
The HDC also approved the use of $7.97 million in tax-exempt bonds for the rehabilitation of two 70-year-old, six-story apartment buildings in the Bronx, which will be purchased by a development company owned in part by former New York Mets first baseman Mo Vaughn. The two buildings, 1971 and 1975 Grand Ave. in Morris Heights, contain 83 apartments and will be rehabilitated by a company controlled by Mill Plain Properties Inc. and Omni New York LLC, a development corporation whose principals are Vaughn and Eugene Schneur.
The companies have previously worked with the HDC to rehabilitate four other developments for low-income families in the city, including, most recently, Grace Towers in East New York, Brooklyn, a 168-unit complex of two buildings at Pennsylvania and Pitkin avenues.
Citigroup Global Markets Inc. will underwrite the deal, and Citibank will provide the letter of credit for the project, which carries Standard & Poor’s AA long-term rating and A1-plus short-term rating, Froehlich said. The bonds are scheduled to sell in June, he said.
The remaining $14 million of bonds approved yesterday will fund a seven-story mixed-use building two blocks south of Grace Towers in Brooklyn. The new building will contain 103 apartments and 19,700 square feet of retail space, as well as 68 parking spaces, and will be built on the largely vacant lot at 626 Sutter Ave. The developer will be Jackson Development Group, a company that is developing two properties in the Bronx that also were financed by the Housing Development Corp.
Merrill Lynch & Co. will underwrite the deal, with a letter of credit from Citibank, Froehlich said. The HDC expects to price the bonds — which carry a long-term Standard & Poor’s rating of AA and a short-term rating of A1-plus — at the end of May.
Bond ratings were sought only from Standard & Poor’s, Donovan said.
