After closing its first Liberty bond deal yesterday, the New York City HousingDevelopment Corp. is poised to sell its second such deal this quarter. At the same time,the New York State Housing Finance Agency, which has sold three Liberty bond deals andgiven final approval to a fourth, has yet another one keyed up for preliminary approval.
The flurry of activity could bring the total volume of Liberty bonds sold formultifamily housing to more than $600 million by the end of the quarter, leaving $1billion in authorization. Taking into account the two agencies' number of preliminaryapprovals - called declarations of intent - for projects, officials said they are poisedto use all of the $1.6 billion in tax-exempt Liberty bonds authorized for housing.
In contrast, the agencies designated to sell Liberty bonds for commercial developmentshave yet to use any of the $6.4 billion in remaining authorization, and have only givenpreliminary approval to a few projects. Steve Spinola, president of the Real EstateBoard of New York, said he expects the city and the state to lobby the federalgovernment to extend the Liberty bond program, which sunsets at the end of next year,and reallocate some of the authorization to residential from commercial.
"We need to go in and ask for an extension," Spinola said. "We're also convinced we willsoon use up all of the $1.6 billion for residential."
Tracy Paurowski, a New York City Housing Development Corp. spokeswoman, said yesterdaythat the HDC board is expected to approve a $200 million Liberty bond sale for RockroseDevelopment Corp. at its monthly meeting a week from this Monday. Rockrose is using theproceeds to finance the development of a 650-unit rental housing project at Two GoldStreet, near Wall Street, and the bonds could be sold before the end of the quarter.
The board induced the project late last year, approving a declaration of intent toensure that the entire cost of the development could be financed with tax-exempt bonds.The variable-rate bonds are expected to have a final maturity of 2036, Paurowski said.Bear, Stearns & Co. is senior manager, and the developer recently struck a deal to havethe bonds enhanced with a letter of credit from Fleet National Bank.
Yesterday, HDC closed on the sale of $74.8 million in tax-exempt Liberty bonds for JDMWashington LLC, which is developing 386 units of rental housing at 90 Washington St.Merrill Lynch & Co. was senior manager and KeyBank provided the liquidity support forthe agency's first Liberty deal.
In addition, HDC has induced eight projects totaling around $960 million for tax-exemptLiberty bonds, and expects to provide final approval on a first come, first serve basis.It is splitting the $1.6 billion in housing authorization with the state housing financeagency.
The HFA has sold three Liberty bond deals totaling $233 million. On June 26, it sold $38million in tax-exempt Historic Front Street bonds for Sciame Family Partnership andZuberry Associates, which are developing a 92-unit rental project in the South StreetHistoric Seaport. Newman & Associates was lead manager and the Bank of New York provideda letter of credit for the bonds, which mature in 2036.
In February, the state housing agency sold $95 million in Liberty Street housing revenuebonds for Glenwood Management Corp. UBS Financial Services was lead manager and Fleetprovided a letter of credit. The bonds mature in 2035. Last November, the agency sold$100 million in 20 River Terrace housing revenue bonds. J.P. Morgan Securities Inc. waslead manager.
The HFA board has also given final approval for the sale of $115 million in bonds forthe Related Cos., which is developing a 264-unit project in Battery Park City. The boardcould also later this month induce $135 million in financing for a 339-unit project at10 Barclay St., according to Tracy Oats, HFA's vice president for policy and planning.
In addition, the state HFA's board induced two projects valued at $205 million in April.
