Preservation Development Partners, a joint venture of developers Donald Capoccia, Joseph Ferrara, Brandon Baron, Francine Kellman and Brian Raddock, announced the acquisition of Surrey Carlton Apartments in upstate Spring Valley, NY.
The 176-unit, four-building rental complex, located at 45-47 Ewing Avenue, was purchased for $23.5 million from APS Realty Corp., and the new owners have planned for an additional $4.7 million in capital improvements to the property. Surrey Carlton Apartments, built in 1965, contains 32 one-bedroom units, 134 two-bedroom units, 8 three-bedrooms, and 2 five-bedrooms.
The multifamily property benefits from a federal Project-Based Section 8 Contract (HAP Contract) which will be renewed for 20 years. The Section 8 contract, which subsidizes tenants’ rental payments, will limit the vacancy risk for the new owners and it will preserve much-needed affordable housing in the Spring Valley community.
Francine Kellman, PDP principal, said, “Affordable housing is vital to the pace of economic development of Spring Valley. Businesses are attracted to locations that offer a labor pool with roots in the community. We’re proud that almost 200 families at Surrey Carlton will have low-cost housing that’s guaranteed for at least the next 20 years.”
Mr. Raddock, PDP principal, said, “This purchase signifies our commitment to preserve affordable housing stock and eliminate the risk of it being converted into market rate units. We have plans to do extensive work on the property to improve living standards of the tenants at Surrey Carlton and to improve the community overall.”
The rehabilitation construction will begin in fall 2012. All four buildings will receive new exterior doors. Common areas, hallways and individual units will receive sheetrock repairs, fresh paint, and new flooring finishes. Hallways will receive new metal stairways. Individual units also will receive electrical wiring upgrades, better lighting, and new appliances including stoves and refrigerators, along with stainless steel sinks and new cabinets. Bathrooms will be completely renovated with new toilets, vanities, sinks, shower shells and new tiling.
No tenants will be displaced during the construction, which is expected to be completed in mid-2013.
Financing for the acquisition of Surrey Carlton Apartments was provided by tax-exempt bonds issued by the New York State Housing Finance Agency (HFA), and a Freddie Mac Low Income Housing Tax Credit (LIHTC) Mod Rehab program. The project will also be capitalized with equity from Wells Fargo in the project’s “4%” Low income housing tax credits.
Preservation Development Partners is a partnership formed by K&R Preservation and BFC Partners. K&R is owned and operated by its principals, Ms. Kellman and Mr. Raddock. Together, they have acquired and rehabilitated a growing portfolio of affordable multifamily properties, including Trinity Apartments in the Bronx and East River Apartments in Manhattan’s East Harlem neighborhood. Prior to forming K&R, Ms. Kellman and Mr. Raddock closed on two affordable housing properties in the Bronx and Manhattan for a Seattle based developer. They oversaw the complicated rehabilitation and positive transformation of the Manhattan property, Lexington Courts, which, when acquired consisted of nine buildings in various states of deterioration.
BFC Partners is owned and operated by its three principals, Messrs. Capoccia, Ferrara and Baron. The essence of BFC’s activities over the past 25 years has been the acquisition, development, financing, construction, marketing and management of affordable housing, which includes government subsidized low and moderate-rental as well as for sale home ownership. BFC and its principals have concluded over $550 million in acquisition and development projects since the firm’s inception. The construction contract amount for those projects exceeds $350 million and encompasses the construction of 4,000 units ranging from single family newly constructed units in Long Island to the substantial rehabilitation of multi-site, multiple dwellings with over 120 units, to smaller scattered site projects requiring the substantial rehabilitation of 6 to 17 unit buildings.