Wells Fargo Provides $52.6 Million in Bond Credit Enhancements through Freddie Mac Under the Federal New Issue Bond Program

Staten Island, New York – January 24, 2011 – The NYC Housing Development Corporation (HDC), NYC Department of Housing Preservation and Development (HPD), the Department of Housing and Urban Development (HUD), the Arker Companies, Wells Fargo, and Freddie Mac have joined to rehabilitate two affordable multi-family properties on Staten Island, preserving 430 apartments as affordable to low-income tenants. Collectively known as Concord Seaside, the Concord Court and Seaside Plaza apartment complexes are located in the Park Hill and Fort Worth neighborhoods, approximately 2 miles apart from each. 

Concord Seaside is being developed under Mayor Michael R. Bloomberg’s New Housing Marketplace Plan (NHMP), an $8.4 billion initiative to finance 165,000 units of affordable housing for half a million New Yorkers by 2014. To date, the plan has funded the creation or preservation of 110,390 units of affordable housing across the five boroughs.

“Preserving affordable homes is a critical component of HDC’s commitment to the Mayor’s housing plan,” said Marc Jahr, President of HDC.  “In moving this preservation project to fruition, we've enjoyed a tremendous level of collaboration that is ensuring that Concord Seaside is preserved as decent, affordable housing for current and future residents of the complex.”

“Developments like Concord Seaside are bricks and mortar proof of what can be accomplished when both government and private partners share a commitment to a greater cause,” said HPD Commissioner Rafael E. Cestero. “Today we are taking a critical step in ensuring that 430 New York families will have access to quality, affordable homes. I thank HDC, the Arker Companies, HUD, Wells Fargo and Freddie Mac for helping us achieve our goal of creating a stronger, more affordable and sustainable New York.”

HDC issued more than $52 million in bonds through a credit enhancement by Wells Fargo and Freddie Mac using the using the Obama Administration’s New Issue Bond Program (NIBP) that supports the development or renovation of affordable multifamily properties. Wells Fargo originated the Freddie Mac credit enhanced financing and Wells Fargo was also the Low Income Housing Tax Credit investor. HPD provided a real estate tax abatement for the project in addition to an allocation of Low Income Housing Tax Credits. Additionally, the Department of Housing and Urban Development (HUD) agreed to extend the projects’ Section 8 contracts for an additional 20 years. The Arker Companies, the developer for the project, will use the funds to acquire and rehabilitate the two affordable multi-family properties.

“We are extremely pleased to have the opportunity to preserve this project as affordable housing and continue the efforts of Mayor Bloomberg and his New Housing Marketplace Plan,” said Daniel Moritz, Principal of the Arker Companies. “It is only through the diligent work and cooperation between City and Federal Agencies, including HDC, HPD, HUD and Freddie Mac, that we were able to successfully finance this complicated project.”

“The preservation of Seaside Plaza and Concord Court, as quality affordable housing, represents the finest in what public/private partnerships can accomplish,” said HUD Regional Administrator Adolfo Carrión. “This is especially impressive given the downturn in the economy and the scarcity of credit. Wells Fargo and the Arker Companies are answering the call for the ever-growing need for affordable housing throughout New York City. I am proud of HUD’s investment and congratulate all our partners who have made this possible.”

“Arker has a long, successful history of preserving affordable housing and we are pleased to assist by providing the loan and investment needed to get the rehabilitation underway,” said Rachel Grossman, managing director of Wells Fargo who oversaw this transaction.

Kim Griffith, vice president of Multifamily Affordable Production and Investments for Freddie Mac, said, “The financing is the result of months of hard work and collaboration by many entities, including HDC and other city agencies, working together to keep these properties affordable.”

Concord Seaside will be partially financed under HDC’s Low-Income Affordable Marketplace Program (LAMP) with a $52.6 million HDC First Loan, which will consist of approximately $41.27 million in New Volume Cap Bonds and $11.4 million in recycled volume cap.

The Concord Court, located at 55 Bowen Street, and Seaside Plaza, located at 18-20 Father Capodanno Boulevard, were built in 1971 pursuant to the HUD Section 8 New Construction Program by a single developer with Seaside Plaza containing 274 units and Concord Court with 156. Extensive renovations are planned for both properties, some of which include the complete renovation of the kitchens and bathrooms, replacement of all entry and interior doors, roof replacement, elevator rehabilitation, new security system, and mechanical, electrical and plumbing system upgrades. It is expected that this substantial rehabilitation will extend the useful life of the properties to 50 years. Total development cost for the project is in excess of $80,000,000. Concord Seaside will serve low-income tenants earning up to 60% of the Area Median Income (AMI), currently $47,520 for a family of four.

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About the NYC Housing Development Corporation (HDC)

The Housing Development Corporation (HDC) provides a variety of financing programs for the creation and preservation of multi-family affordable housing throughout New York City. In partnership with the NYC Department of Housing Preservation and Development, HDC works to implement Mayor Michael R. Bloomberg’s New Housing Marketplace Plan to finance the creation or preservation of 165,000 affordable housing units by the end of the 2014 fiscal year. Since the plan launched in 2003, HDC financed nearly 47,521 homes for low- , moderate- and middle-income New Yorkers. The New York City Housing Development Corporation is rated AA by S&P and Aa2 by Moody’s.

About the NYC Department of Housing Preservation and Development (HPD)

 HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards. It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation of 165,000 units of affordable housing by 2014. Since the plan’s inception, a total of more than 110,300 affordable homes have been created or preserved. For more information, visit www.nyc.gov/hpd

About HUD

HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers.  In addition, HUD meets the need for quality affordable rental homes, utilizing housing as a platform for improving quality of life, and building inclusive and sustainable communities which are free from discrimination.

About The Arker Companies

The Arker Companies has been building projects in New York City for more than 30 years. Located in Floral Park on Long Island, the development company contracts, owns, and manages multi-family and single-family housing, and retail and office projects.  It is one of the leading developers of affordable housing in New York in its building of more than 4,000 units, for rent and for sale.  Arker also develops market-rate, commercial and mixed-used projects.  Company principals are Sol, Allan and Alex Arker and Daniel Moritz.

About Wells Fargo

Wells Fargo supports the creation and preservation of affordable housing in communities nationwide through debt and equity investments by providing permanent financing through the programs of Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA); balance sheet construction and bridge loans; credit enhancements and forward commitments; and direct and syndicated tax credit equity investments.

Wells Fargo & Company is a diversified financial services company with $1.2 trillion in assets, providing banking, insurance, investments, mortgage and consumer finance through more than 10,000 stores, over 12,000 ATMs and the internet (wellsfargo.com) across North America and internationally. 

About Freddie Mac 

Since the launch of Freddie Mac's multifamily business in 1993, it has provided more than $214 billion in financing for approximately 56,000 multifamily properties.  

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

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