In October of 2021 Park Lake Hempstead, L.P. closed on the financing for the renovation of 240 units of Section 8 housing in the Village of Hempstead in Nassau County, New York.
The developers Metropolitan Realty Group (MRG) and Silver Street Development, teamed up for the preservation and transformation of the Park Lake Apartments. Scott Jaffee is the founder and managing member of MRG, which works to create safe, low-cost communities in and around the New York Metro area. Specializing in affordable housing, MRG has a roster of 4,200 units of project-based Section 8 housing.
Chris Poulin is an original founder and partner of Silver Street Development. As Chief Financial and Operating Officer, Chris has overseen the construction, acquisition and stabilization of over seventy-six communities across fourteen states.
The project will include the complete rehabilitation of the 14 two-story buildings and landscaping across the 12-acre Park Lake property. Originally designed as housing for the military in the 1940’s, Park Lake’s 240 apartments will be transformed with new kitchens, baths, flooring, ceilings, and upgrades to all common areas. Existing tenants will be able to stay at the property in temporary hospitality units while their apartments are renovated.
The investment in this project represents about $135,000 in improvements per unit, more than double the average investment for a project of this type. Building renovations will also include the installation of photovoltaic solar panels and other energy-efficient appliances, a $1.9 million investment in the environmental sustainability of Park Lake. The construction phase of the project will utilize workers from the surrounding area paid under a prevailing wage agreement.
The property was acquired from the previous owners in 2018, beginning a multidisciplinary effort that culminated with the closing of the current project financing. As a preservation owner and developer, the new Park Lake ownership faced considerable market and governmental challenges to acquire the property and bring this project to fruition.
Complex financing for the acquisition and renovation reflects a 2-year public-private effort. Signature Bank and CREA LLC contributed $43.5 million in equity financing to the project. Rockport Mortgage Corporation assisted in closing $86.6 million in HUD Section 221(d)(4) financing, with a fixed interest rate of 2.55%, and a 40-year fully amortizing term following a 2-year construction period. The total project cost is about $135 million.
In July 2021, the Town of Hempstead Industrial Development Agency (IDA) approved the extension of a long-term PILOT (payments in lieu of taxes) program for a total of 25 years. The PILOT will ensure that the project is financially feasible for years to come, while gradually increasing the amount paid over time.
In September 2021, the Nassau County Local Economic Assistance Corporation (LEAC) approved the issuance of tax-exempt revenue bonds in the amount of $63.5 million. The award of these bonds was followed by a commitment from Rockport Mortgage Corporation to effectuate the $86.6 million HUD financing.
Renovations of the Park Lake property began in November of 2021. Construction is expected to take 18 months.
Instrumental advisors on the project include: Michael Schwartz (Signature Bank), Michael Murray (CREA LLC), Dan Lyons (Rockport Mortgage), local counsel Dan Deegan (Forchelli Deegan Terrana LLC), and Joseph Lynch (Nixon Peabody).
On Long Island, the need for affordable housing to spur economic growth has been a difficult task for decades. Both Scott Jaffee and Chris Poulin have overcome considerable obstacles in this multi-year effort, demonstrating a true commitment to long-term affordable multi-family public housing.
Scott Jaffee stated: “This project stands as one that will stabilize the surrounding community; and in doing so improve the lives of those who will live there and enjoy a transformed lifestyle for the better.”
According to Chris Poulin, who has decades of experience in the affordable housing sector: “The preservation of Section 8 housing is of lasting importance in the overall housing marketplace. Its benefits are substantial to uplifting its residents and the broader community as well.”