NEW YORK – Mortgage banking company Merchants Capital today announces the closing of a $51 million construction loan and a $28.4 million Freddie Mac 9% Low-Income Housing Tax Credit (LIHTC) Cash Unfunded Forward Commitment to fund a new affordable housing project in Manhattan’s Upper West Side. The total $80 million funds for the project, located in the historic Park 79 Hotel, comprises the largest 9% LIHTC allocation in New York City.
Renovations to the original hotel, which first debuted in 1899 as “The Indiana,” will create 77 deeply affordable residences for very-low income seniors in the heart of Manhattan. Under an agreement with the New York City Department of Housing Preservation and Development (HPD), the property will remain affordable for at least 60 years.
“Redeveloping the Park 79 Hotel and structuring affordable apartments for senior residents in Manhattan is a commendable task, and we at Merchants Capital are thrilled to have worked as a partner on this project, especially with the borrower, Fairstead,” said Mathew Wambua, vice chairman and head of agency lending at Merchants Capital. “We as a company are committed to providing accessible and affordable housing options across the country, and this project is the epitome of that commitment.”
Fairstead, the project developer, will oversee renovations, reconfiguring the seven-story building into 77 apartments along with multiple community spaces, including an indoor/outdoor community room, dining room and meeting rooms.
Additional rehabilitation will be done throughout the building, including new elevator service, creation of a common dining and recreation room, social services offices and an outdoor garden area. Upon completion, the property will employ two full-time social service coordinators to work alongside residents in organizing community programming events. The building will also have a full-time attendant serving residents as a lobby concierge.
“The partnership and commitment from Fairstead and the New York City Department of Housing Preservation and Development (HPD) has brought this meaningful affordable housing redevelopment to life,” said Michael Milazzo, vice president of loan originations at Merchants Capital. “This project will provide New York City’s senior residents with the quality housing and services they deserve. A special thank you is in order to HPD – for pushing forward under the most adverse of conditions to get this project closed in a timely manner. We also want to thank Will Blodgett of Fairstead for the company’s dedication to housing for all.”
Redevelopment of the Park 79 Hotel creates affordable housing in an extremely desirable location of New York City, where affordability and accessibility is traditionally hard to find. Located steps away from Central Park, the project will allow Manhattan’s low-income seniors to continue residing in their home neighborhood without having to look for affordable housing outside of the city limits.
“At a moment when the need for high-quality affordable housing for New York’s seniors couldn’t be more urgent, we are beyond proud to break ground on creating 77 deeply affordable residences for seniors right in the heart of the Upper West Side, and grateful to Merchants Capital for its partnership” said Will Blodgett, founding partner of Fairstead. “We pride ourselves in creating and preserving high-quality affordable housing in high-opportunity areas, and it’s so gratifying to provide these homes for seniors just steps from Central Park, the Museum of Natural History and the JCC. The revamped building will have great amenities for residents – but the neighborhood itself will really be its greatest amenity.”
Renovation on the original hotel is expected to be completed in 2022.