$15.5M Brooklyn development opens.

The New York City Housing Development Corporation (HDC), The New York City Department of Housing Preservation and Development (HPD), elected officials, and Fleet Bank celebrated last week the opening of The Fountains at Spring Creek. The development, located in East New York at 922 and 1101 Forbell Street, consists of two newly constructed three-story buildings containing a total of 102 affordable apartments.

Located near the new Gateway Plaza Shopping Center, the Fountains at Spring Creek, is part of the quality of life initiatives and economic revitalization efforts underway in East New York. A partnership between the public and private sectors enabled the development, which cost $15.5 million to construct, to be financed as an affordable housing for low-income residents. Monthly rents range from $586--$753 for the studio, one- and two-bedroom apartments.

HDC provided a $7.8 million construction loan through its Low-Income Affordable Housing Marketplace Program (LAMP). Through this program tax-exempt bonds are issued to make a low-cost loan and qualify a development to receive Federal Low-Income Housing Tax Credits. WNC and Associates acted as the tax credit investor and Fleet Bank provided the Letter of Credit necessary to secure the bond financing. This combination reduces development costs and allows the rents to be more affordable.

"We are delighted we could play a pivotal role in supporting development of this attractive affordable housing," said Philip Grossman, Executive Vice President and Market Manager, Community Real Estate Finance at Fleet. "These kinds of creative partnerships are providing decent housing for low-income families while continuing to restore neighborhoods and communities across the city." Since 1998, Fleet has provided nearly $50 million in financing for the creation of affordable housing in East New York resulting in over 703 residential units.

In addition to the low cost financing the Arker Companies received funding through the sale of HPD's 421-a Negotiable Certificates. Developers of low-income housing receive these certificates from HPD and, in turn, sell them to developers of market-rate housing in mid-Manhattan. The proceeds from the sale of these certificates enable the low-income developers to pay off the debt on their projects. With no permanent debt left on the property, the developers are able to charge less for rents, making the apartments more affordable.

This development will provide 421-a partial tax exemption benefits for 520 eligible units in the Manhattan geographic exclusion area.

HPD commissioner Jerilyn Perine said, "This development demonstrates the effectiveness of public private partnerships in financing affordable housing. Mayor Bloomberg's housing plan, The New Housing Marketplace: Creating Housing for the Next Generation, will rely on such partnerships to increase housing investment in neighborhoods with the greatest need like East New York."

The developers for The Fountains at Spring Creek, the Arker Companies, fully owned by Sol, Allan and Alex Arker, have developed and built over 3,000 apartment units throughout New York City over the last 25 years. With HDC financing, the Arkers have completed fifteen developments with a total of 783 apartments.

"Throughout the years of our involvement in affordable housing we continue to develop projects that contain building and tenant amenities which maximize the use of government assistance and private equity providing a quality product with maximum curb appeal--something which goes far beyond the stereotypic 'subsidized housing'--something we are all proud of," said Sol Arker, Principal of Arker Companies.