Case Study 20

Case Study

Cypress Hills Acquires Public Land for Senior Housing

Background

Cypress Hills Local Development Corporation (CHLDC), a non-profit community development organization, is building 53 affordable units for seniors on former city land in East New York. CHLDC found the essentially idle city property through a community survey it conducted over 10 years ago of all vacant public and private land in the neighborhood.

Strategy

Cypress Hills’ staff then drew on its knowledge of city government to learn that the site at 137 Jamaica Avenue was a former water pump station controlled by the Department of Environmental Protection (“DEP”). In 2005, CHLDC contacted DEP’s intergovernmental affairs office and inquired about the property and explained that if available, CHLDC wanted to acquire the site for low cost housing.

Before DEP would consider disposing of the property, the agency, with repeated prodding by Cypress Hills, had to determine if releasing the site was aligned with the City’s long term plans for phasing out certain water tunnels and pump stations and delivering clean and safe drinking water to all New Yorkers. The agency determined it could release most of the site and then commissioned a survey to subdivide the parcel.

Meanwhile, CHLDC contacted the head of the City Department of Housing Preservation and Development’s (“HPD”) Brooklyn planning office to discuss its plans for the property. HPD is one of two city agencies that can dispose of city land, and CHLDC had to persuade the agency to convey the property to CHLDC as a site for affordable senior housing.

Although it had approached both DEP and HPD about its housing plans and their legal staffs had discussed the terms of a transfer of the land to HPD, the two agencies hadn’t decided to work together on disposition of the site. As Michelle Neugebauer, CHLDC’s executive director recalls, it took the intervention of the HPD Commissioner and the Deputy Mayors overseeing DEP and HPD to complete the transfer of land between the two agencies. “We learned that very high level intervention and advocacy is needed to make the transfer of land between two agencies possible,” she said.

Conclusion

As to the land disposition method, CHLDC Hills was able to purchase the land from HPD for $1 through a sole-source procurement, which was open to CHLDC only. The agency agreed to a sole-source disposition with CHLDC because of its track record of building low cost housing in East New York.

Since CHLDC obtained 137 Jamaica Avenue, HPD has restricted the use of sole source procurement and today will only use this method to dispose of city property where a community or private developer plans to build low cost housing and owns an adjoining parcel.

Meanwhile, Cypress Hills assembled financing for the $20.5 million project by securing $8.9 million in Section 202 funding from the U.S. Department of Housing and Urban Development to pay for the project’s capital and operating costs. HPD will also contribute $2.3 million and low-income housing tax credits.

Construction on the five-story building began in November 2015. The building is anticipated to open in early 2017.

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