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Rockland IDA Bond Financing Facilitates Continued Availability Of Section 8 Housing In Rockland County
By Tina Traster
It felt more like a wedding or a reunion than a ribbon cutting because Andy Cavaluzzi was viscerally emotional over what he and his partner Jason Bordainick had accomplished. It was hardly the first time the partners of Hudson Valley Property Group had purchased and renovated a housing project, but it was their maiden voyage into Rockland County, and more specifically, Spring Valley, where both grew up.
“This is my hometown,” said Cavaluzzi, referring to the $47 million acquisition and renovation of two Section-8 properties in Spring Valley: Lakeview Village, a 144-unit senior housing property, and Highview Apartments, a 76-unit family housing property. “I grew up in the Village of Spring Valley. Mom was a Spanish teacher, Dad taught English. I remember Pop Warner Days, placing lacrosse in Memorial Park.”
Cavaluzzi mentioned that he and Bordainick were childhood friends.
HVPG purchases and renovates affordable housing nationwide; to date it has acquired more than 10,200 units across more than 60 properties, serving more than 20,000 residents. On a beautiful autumn day, the partners celebrated the $11 million renovation (or roughly $45,000 per unit), which included a tour of a Highview ground floor apartment that had updated kitchen and bathroom fixtures, fresh paint, and lighting. Roughly 400 people live at the two complexes.
Both properties have been given night vision security cameras, energy-saving LED lighting, E-STAR Windows, new signage, balcony repairs, landscaping upgrades, and ADA compliant sitework.
“It’s a blessing to uplift the spirit,” said Bordainick. “I grew up in Spring Valley. This is a second generation giving back to the community that’s given us so much.”
Bordainick pointed about that it “took a village” to make this project happen, citing cooperation from the Village of Spring Valley, the Town of Clarkstown, the Rockland County Industrial Development Agency and New York State tax credits.
The properties were initially acquired with an equity contribution from HVPG’s latest fund and debt financing through Red Stone, and later bridged to a 4 percent low-income tax credit execution through the New York State Housing & Finance Agency (NYSHFA) and Raymond James, along with tax-exempt bond financing issued by the Rockland County Industrial Development Agency of about $27 million with a private placement through Red Stone. The Town of Clarkstown and Village of Spring Valley also supported the project with a long-term property tax abatement agreement that was instrumental to its success.
To recoup its investment, HVPG raises rents on the units, but tenant rents are based on AMI. Tenants are responsible for 30 percent of the rent.
The properties are subject to a HUD Section 236 Agreement; 80 units are tenant-based Section 8 vouchers. The new financing adds income restrictions for an additional 30-year period.
Eligibility varies with income and number of persons in a household.
There is an ever-increasing demand for affordable housing in Rockland County.
Rockland Gardens – Nyack
Last week, the Village of Nyack voted to approve a PILOT (Payment In Lieu Of Taxes) that would allow the Rockland Gardens Apartments at 84 North Franklin Avenue to take advantage of financial incentives offered through the Rockland Industrial Development Agency (IDA).
The benefits package would ensure that 70 apartments throughout the eight garden-style buildings remain “affordable” under Section 8 of the Federal Housing Assistance Program (HAP). Apartments in the buildings are leased to tenants earning at or below 60 percent of the area median income.
Under the terms of the 20-year PILOT agreement, the assessed value of the complex would be fixed at $1,510,000 for two years, and then increase to $2,320,000 over the next 18 years. Taxes would be levied on the assessed value each year going forward. Current real estate taxes are about $190,000.
The buildings were originally constructed in 1949 and have 36 one-bedroom and 34 two-bedroom apartments. 99% of the units are under Section 8 HAP contracts.
The property was acquired by Vitus, a national affordable housing developer based out of Seattle, WA. According to its application with the Rockland IDA, Vitus has more than 15,000 units across 100 properties in 30 states. It focuses on the acquisition and rehabilitation of Section 8 communities with existing HAP contracts, and extensively renovates them using 4% Low Income Housing Tax Credits to finance improvements.
Estimated acquisition costs for the project were $15 million for the land and buildings. Renovation costs were estimated at $11 million. Tax-exempt bond financing through the IDA in the amount of $14 million and Low Income Housing Tax Credits in the amount of $9.5 million facilitated the deal.
Additional IDA benefits provided to Vitus included mortgage recording and sales tax exemptions valued at approximately $350,000.
According to Vitus, absent the incentives from the IDA, the apartments may have been susceptible to market rate conversion, and the Village may have lost an affordable housing option.
Village of Nyack Mayor Don Hammond strongly favored passage of the PILOT program, recognizing both the continuation of taxes to the village and the continuation of the affordable housing program at the property.
According to Hammond, the Nyack School District had already approved the PILOT agreement, and the Town of Orangetown was still reviewing the application.