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NYC Department of Housing Preservation & Development

FOR IMMEDIATE RELEASE
Tuesday, April 15, 2008

Neill McG. Coleman, HPD, (212) 863-8076
Clara Perez, Enterprise, (212) 780-0200


NEW YORK CITY ACQUISITION FUND SHORTLISTED FOR PRESTIGIOUS “INNOVATIONS IN AMERICAN GOVERNMENT” AWARD

Innovative Fund is a National Model for Financing Affordable Housing

NEW YORK. The Ash Institute at Harvard’s Kennedy School of Government announced today that the NYC Acquisition Fund has been shortlisted as a Top 50 program nationally for the prestigious “Innovations in American Government” Award. The winners of the 2008 award will be announced this summer.  The New York City Acquisition Fund is a $230 million partnership that finances the purchase of land and buildings for affordable housing. It uses cutting-edge private finance tools to allow local or not-for-profit developers to compete in a tough real estate market. The Fund will build and preserve 30,000 units of affordable housing over the next ten years. It uses a sustainable model that will allow the Fund to continue without further investments from foundations or taxpayers.  

The Fund is a key element of Mayor Michael R. Bloomberg’s $7.5 billion ten-year New Housing Marketplace Plan to provide affordable housing for 500,000 New Yorkers, more than the population of Atlanta. In bringing together city government, financial institutions, and foundations, the Fund is a national model of collaboration and is being replicated throughout the country, including in California, Illinois, Georgia and Louisiana. The Acquisition Fund is a collaboration among seven national philanthropies, the City’s leading financial institutions and the City of New York. Enterprise, a leading provider of affordable housing for low-income people nationwide, is the managing general partner of the fund and originator of the loan.

“It is a great honor to have the NYC Acquisition Fund recognized by this nationally-renowned award,” said New York City Housing Commissioner Shaun Donovan. “The Fund has become a national model for collaboration on affordable housing and its success is a reflection of Mayor Bloomberg’s desire to bring together the best ideas from the private and philanthropic sectors. The  strong commitment from foundations and banks has made the Acquisition Fund possible and is evidence of the need for new thinking and collaborations to build and preserve affordable housing.”

“Addressing the nation’s affordable housing crisis demands creative solutions, and the Acquisition Fund is a prime example of the remarkable results that can be achieved when the private, public and non-profit sectors come together,” said Abby Jo Sigal, Vice President and Director of Enterprise New York. “Growing out of a need in the marketplace and our commitment to achieving our Billion Dollar Promise to create and preserve 15,000 units of affordable homes for low-income New Yorkers, the Acquisition Fund helps us not only expand affordable housing opportunities in New York, but also establishes a replicable model for other cities across the country. We are grateful to the Innovation in Government Award for recognizing the efforts of Enterprise and all of the diverse partners we worked with to make the Acquisition Fund a reality.”

The John F. Kennedy School of Government’s Innovations in American Government Program is a significant force in recognizing and promoting excellence and creativity in the public sector. Through its annual awards competition, the Program provides concrete evidence that government can work to improve the quality of life for citizens and that it deserves greater public trust. Many award-winning programs have been replicated across jurisdictions and policy areas, and some have served as harbingers of today’s reform strategies or as forerunners to state and federal legislation. By highlighting exemplary models of government’s innovative performance, the Program serves as a catalyst for continued progress in addressing the nation’s most pressing public concerns. Innovations Award winners receive national press attention, serve as examples of model programs worthy of replication, and spark research and teaching cases at Harvard University and other schools across the country. In the spring of 2001, the Ford Foundation presented the Kennedy School with a grant that endows Innovations in American Government in perpetuity and places it within the Ash Institute for Democratic Governance and Innovation.

In New York City, the supply of City-owned land for affordable housing is nearly exhausted. While the redevelopment of the formerly City-owned portfolio of land and buildings has produced more than 229,000 apartments and houses since 1987, New York City continues to experience a shortage of affordable housing. Many of the developers interested in developing affordable housing are non-profit organizations and local developers who typically do not have the financial resources to compete to acquire property in the private market. The New York City Acquisition Fund, established in 2006, gives developers of affordable housing a level playing field in acquiring property while they assemble permanent financing for the project.

To date, ten different developments have received financing through the Acquisition Fund, totaling $58 million in loans, with a further seven developments in the pipeline. The ten funded developments represent 1,302 affordable homes. On May 1, 2007 the Fund financed the Fordham Bedford Housing Corporation’s acquisition of six occupied buildings in the northwest Bronx comprised of over 280 affordable units, the first preservation project through the Acquisition Fund.

The Acquisition Fund provides early stage capital for acquisition of privately owned land and buildings. An investment of $8 million in City funding through Battery Park City Authority revenues was blended with $32.6 million in foundation funding to create a “guarantee pool” for securing loans. The Starr Foundation made the initial $12.5 million challenge grant that helped lead to the creation of the Fund. Up to $190 million has been made available from major banks and financial institutions such as Bank of America, Bank of Tokyo Mitsubishi, Citi, Commerce Bank, Deutsche Bank, Fannie Mae, HSBC, JPMorgan Chase, Merrill Lynch, Mizuho Corporate Bank, M&T Bank, US Trust, North Fork Bank, Signature Bank, Washington Mutual, and Wachovia. The foundations supporting the Fund include the F.B. Heron Foundation, Ford Foundation, Gimbel Foundation, MacArthur Foundation, New York Community Trust, Open Society Institute, Robin Hood Foundation, Rockefeller Foundation, and The Starr Foundation. The Fund provides loans to borrowers through not-for-profit lenders including Enterprise, the New York City Housing Development Corporation, Local Initiatives Support Corporation, the Corporation for Supportive Housing, and the Low Income Investment Fund.

The Fund is managed by Enterprise, the managing general partner of the Fund and the originator of the loan, along with National Equity Fund, Inc. as co-member and manager, and Forsyth Street Advisors as Fund Manager.  JPMorgan Chase Bank N.A. acts as the Administrative Agent of a 16-bank syndicate that provides a revolving line of credit to fund loans. More information on the Fund is available at www.nycacquisitionfund.com.

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The New York City Department of Housing Preservation and Development's (HPD) mission is to promote quality housing and viable neighborhoods for New Yorkers. The department is the nation’s largest municipal housing development agency and is implementing Mayor Bloomberg’s New Housing Marketplace Plan to build and preserve 165,000 units of affordable housing over ten years. The New Housing Marketplace Plan is the largest municipal affordable housing effort in the nation’s history. As part of Mayor Bloomberg’s PlaNYC HPD is working to create homes for almost a million more New Yorkers by 2030 while making housing more affordable and sustainable.  HPD also encourages the preservation of affordable housing through education, outreach, loan programs and enforcement of housing quality standards.

 Enterprise is a leading provider of the development capital and expertise it takes to create decent, affordable homes and rebuild communities. For more than two decades, Enterprise has pioneered neighborhood solutions through public-private partnerships with financial institutions, governments, community organizations and others that share our vision. Enterprise has raised and invested $8 billion in equity, grants and loans and is currently investing in communities at a rate of $1 billion a year. Enterprise New York has been working to revitalize low-income communities across New York City since 1987.  In that time, Enterprise New York has housed approximately 70,000 men, women, and children, developed more than 26,000 affordable homes, and committed $1.7 billion in equity, grants, and loans to community development projects across the city. Visit www.enterprisecommunity.org to learn more about Enterprise’s efforts to build communities and opportunity, and to meet some of the half a million people we have helped.

 




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