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NYC Department of Housing Preservation & Development

FOR IMMEDIATE RELEASE
Friday, June 22, 2012

Eric Bederman (HPD) 212-863-5176


HPD COMMISSIONER WAMBUA, COUNCIL MEMBER RODRIGUEZ, CLOTH, ALEMBIC, ENTERPRISE, CAPITAL ONE BANK & CHASE ANNOUNCE $21.1 MILLION FOR REHAB OF INFAMOUS INWOOD BUILDING

552 Academy Street to Receive Gut Rehab Including New Elevator and New Community Room

Tenants Will Have Safe, Affordable Homes As Result of Comprehensive Public/Private Effort 

Inwood – NYC Department of Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua, Council Member Ydanis Rodriguez, Executive Director of Community League of the Heights (CLOTH) Yvonne Stennett, Director for Syndication, Enterprise Community Investment, Inc. Daniel Magidson, Alembic Community Development Principal Arlo Chase, and Capital One Bank Senior Vice President and New York Metro Region Executive Karim Hill announced $21.1 million to fund the extensive rehabilitation of the 72-unit building at 552 Academy Street in Inwood. CLOTH, a Washington Heights-based community nonprofit, is rehabilitating the property through a joint venture with Alembic. When complete, the rehabilitation will enable the families to return to newly renovated apartments at the existing affordable rents, and will provide previously unavailable amenities, including an elevator and a community room. Also in attendance were State Senator Adriano Espaillat, Assemblyman Guillermo Linares, Community Board 12 Chair Pamela Palanque-North, and President of the 552 Academy Street Tenants’ Association Iris Bertoni. 

In 2011 the tenants were vacated by the City because of immediately hazardous conditions brought on by years of neglect by the previous owner, including structural issues that threatened to destabilize the building. Following the vacate order, a comprehensive effort was undertaken by HPD, Council Member Rodriguez, CLOTH and others to temporarily relocate all of the tenants, stabilize the building, find a new owner, and secure the funding necessary to rehabilitate the property. 

”This building has a history that is unfortunately not as uncommon as we would like, but one thing that it has in its favor is a support network equal to no other,” said HPD Commissioner Wambua. “Our celebration here today is the result of many hands – Our elected officials and leaders like Councilmember Rodriguez, CLOTH, Alembic, Capital One Bank, Enterprise, the hardworking public servants at HPD, and most important, the tenants who refused to give up and kept their faith that they would be able to come back to their homes. The physical infrastructure of 552 Academy Street may have been close to collapse, but the social infrastructure of this community wasn’t about to let it fail.”  

“Recognizing the dire need to bring relief to the tenants of 552 Academy, I launched my councilmanic campaign from its steps pledging to provide both financial and any other support necessary,” said Councilman Ydanis Rodriguez. “I am pleased that all the forces aligned and we are able to rehabilitate the homes of very deserving tenants.” 

552 Academy Street is being rehabilitated as part of Mayor Michael R. Bloomberg’s New Housing Marketplace Plan. The plan is a multi-billion dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of Fiscal Year 2014. For every dollar invested by the City, the plan has leveraged $3.41 in private funding, amounting to a total commitment to date of more than $19.4 billion to fund the creation or preservation of over 131,360 units of affordable housing across the five boroughs. 

“CLOTH is committed to providing safe, affordable housing for residents of Washington Heights,” said Yvonne Stennett, Executive Director, CLOTH. “The successful renovation of 552 Academy will contribute to CLOTH’s historical development of over 1,500 affordable housing units during CLOTH’s 60 years of service in Washington Heights. With this renovation, the families displaced from the property will return to a place that collectively they have called “home” for more than 30 years.”  

“Alembic Community Development is pleased to once again partner with CLOTH in order to bring our shared vision of a dynamic and thriving Washington Heights community to fruition,” said Alembic Principal Arlo Chase. “Our successful collaboration with CLOTH continues our mission to support community-based and community-led efforts to rebuild underserved neighborhoods.” 

The gut rehabilitation of 552 Academy Street will modernize the building and bring it up to code. HPD’s office of Preservation Finance helped to facilitate the financial plan through which CLOTH and the Alembic Development Corporation were designated as the development team responsible for the renovations. The work will include two major additions championed by Councilman Rodriguez; a new elevator line to what was previously a walk-up building, and a new community facility space. Other renovations will include upgrades to mechanical, electrical and plumbing systems, new boilers, new roof, repairs to common areas, window and doors replacements, and new kitchens and bathrooms. 

“Enterprise is proud to be a part of this project, which will restore homes to nearly 100 New Yorkers displaced by a previously unlivable environment,” said Shola Olatoye, Vice President and New York Market Leader, Enterprise. “Thanks to the power of public-private partnerships and the commitment of dedicated partners like CLOTH, residents will have safer, greener, affordable homes for decades to come.” 

The low-interest financing and other funding sources help to subsidize the construction costs, allowing the development team to ensure that the tenants’ rents will remain affordable when they return. Additionally, HPD requires all substantial rehabilitation projects funded by the City to attain Enterprise Green Communities Certification by adhering to Enterprise Green Communities Criteria, a comprehensive set of guidelines to encourage green building practices by developers of affordable housing. The Enterprise Green Communities Criteria is the only national green building criteria designed for affordable housing. 

“After years of neglect that led to suffering for residents at 552 Academy Street, today’s announcement and the renovations to follow is welcome news for all,” said Senator Adriano Espaillat (D – Manhattan/Bronx), top-ranking Democrat on the Senate Housing Committee. “I am proud to be on this team of leaders who has worked hard to deliver much needed services for residents of 552 Academy. We must continue to improve the conditions at this and all housing complexes throughout the City so that all New Yorkers have access to quality, affordable housing.” 

"I am glad to have worked closely with the Housing, Preservation, & Development (HPD) and the City of New York to assist in the rehabilitation of this building that last year was severely distressed. Many families needed relocation, causing hardship and inconvenience, but I am happy now that all these families will be able to return to a renovated building,” said Assemblymember Guillermo Linares, (72 AD). “I would like to commend HPD for its ongoing work, and other partners involved in this rehabilitation. Special acknowledgement to Yvonne Stennett, Executive Director of CLOTH for providing assistance and temporary housing to these distressed families."

During the construction period Capital One Bank will provide a loan of $14.8 million. Of the approximately $21.1 million in permanent financing, Enterprise is syndicating $16.8 million in Low Income Housing Tax Credit (LIHTC) which were provided by HPD; Capital One Bank was the investor. HPD also provided $1.8 million in federal HOME funds. Council Member Rodriguez provided $1 million in Reso A funding, JP Morgan Chase provided a $1 million dollar permanent loan, and $370,000 in developer equity was also contributed. 

"At Capital One Bank, we recognize that investing in affordable housing is about much more than financing construction. It’s about investing in the individuals, families in the community." said Karim Hill, Senior Vice President, New York Metro Region Executive, Capital One Bank.  "We are proud to continue working with our local partners to invest in high-quality, affordable housing for New Yorkers." 

“As New York City’s largest bank, Chase is committed to investing in projects that have a positive and sustainable impact on communities where we operate,” said Susan Hyman, Senior Banker for Chase Community Development Banking. “The renovations of 552 Academy will bring much-needed quality, affordable housing back to the Washington Heights community.” 

The former owner of 552 Academy was also responsible for the infamous Ocelot portfolio of severely distressed buildings in the Bronx. Purchased at the height of the real estate bubble with an unsupportable debt, 552 Academy Street slid into a state of physical and financial distress – forcing the tenants to live in substandard and hazardous conditions. In December 2009, the tenants of the building represented by the Legal Aid Society and HPD’s Housing Litigation Division (HLD) obtained an order from the Housing Court appointing Yvonne Stennett of CLOTH as the 7A Administrator for the building. 

In February 2011 when the City’s Department of Buildings issued the order to vacate the tenants due to hazardous structural issues, there were more than 1,000 open housing code violations issued by HPD’s division of Code Enforcement. Many apartments also had no heat or gas, the building had sporadic water service, and residents lived in fear due to open drug dealing, prostitution and crime within the building. 

Following the order to vacate the property, HPD’s Emergency Housing Response and Client and Housing Services divisions worked with Councilman Rodriguez, CLOTH and others to provide temporary shelter and support services such as off-site registration, intake services, public benefits advocacy, and moving and storage coordination. HPD staff also worked to save the building by bracing, demolishing and rebuilding an entire portion of the rear wall and installing interior bracing throughout the building, ensuring that a full-scale demolition was not needed.   

In order to proceed with any plan to finance the rehabilitation of 552 Academy Street and bring relief to the tenants, a change in the building’s ownership would be necessary. HPD’s Housing Litigation Division had been actively litigating against the owner of the building in Housing Court for a number of years, and had obtained judgments for civil penalties in the amount of $200,000 and for further civil penalties and contempt with civil penalties in the amount of $210,250 which were placed as liens against the property when the owners failed to pay them. After extensive negotiations, HPD was able to leverage the work of its past litigation, and obtain an agreement from the owner to transfer the property to CLOTH in return for HPD not enforcing the outstanding judgments against them. With the change to a new responsible, preservation-oriented owner, all of the partners were able to come together to put in place the financing and rehabilitation plan that will restore 552 Academy Street and give the tenants the safe, affordable homes they have long fought for and deserve.

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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, more than 131,360 affordable homes have been created or preserved. Visit: www.nyc.gov/hpd.

 About Alembic Community Development:

Alembic is a community development company that makes long-term commitments to partnerships and investments in underserved neighborhoods through real estate development, organizational capacity building and community-based planning initiatives.  Alembic has developed over 250 units of housing in New York City for low-income households and individuals and families with special needs, and completed planning and infrastructure work for 32-units of affordable housing in Pass Christian, Mississippi.  Visit: www.alembiccommunity.com

About CLOTH:

Community League of the Heights has served the Washington Heights community for over sixty years.  Started in 1952 by concerned parents, CLOTH has grown into a multiservice community based organization whose mission encompasses advocacy, organizing and providing of services related to decent affordable housing, education, health, youth services and neighborhood improvement.  Visit: http://www.cloth159.org

 About Enterprise:

Enterprise is a leading provider of the development capital and expertise it takes to create decent, affordable homes and rebuild communities. For 30 years, Enterprise has introduced neighborhood solutions through public-private partnerships with financial institutions, governments, community organizations and others that share our vision. Enterprise has raised and invested more than $11 billion in equity, grants and loans to help build or preserve nearly 300,000 affordable rental and for-sale homes to create vital communities. Visit www.EnterpriseCommunity.org and www.EnterpriseCommunity.com to learn more about Enterprise's efforts to build communities and opportunity.

 Since opening our New York office in 1987, Enterprise has created or preserved more than 35,000 affordable homes for 116,000 New Yorkers, and has committed over $2.3 billion in equity, grants, and loans to community development projects across the city.

 About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., Capital One Bank (USA), N. A., and ING Bank, fsb, had $216.5 billion in deposits and $294.5 billion in total assets outstanding as of March 31, 2012. Headquartered in McLean, Virginia, Capital One and ING Direct offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has approximately 1,000 branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol "COF" and is included in the S&P 100 index.




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