Bad economy hurts Yonkers' affordable housing projects

Ernie Garcia
The Journal News
January 4, 2008

YONKERS - The nation's financial crisis has frozen two affordable housing proposals in the city and shrunken another, while a fourth narrowly avoided a loss of loan commitments.

The most significant development affected by diminishing lending and investor pools for affordable housing is a 45-unit senior-citizen complex proposed for Ashburton Avenue next to the former Yonkers General Hospital parking garage, and a 15-unit complex proposed at the site of a former firehouse on Vineyard Avenue.

The two proposals, known as Site A for the Mulford Gardens replacement project, envisioned two- and one-bedroom rental apartments that would have served as replacement housing for the 550-unit public housing project currently undergoing demolition.

The Richman Group Development Corp. advised the city's Municipal Housing Authority in June that it could not move forward with the Site A buildings. Both proposals are now in limbo.

Joseph Shuldiner, the housing authority's executive director, said he was hopeful Richman could re-apply in February for new tax credits.

"The 15 units at the firehouse will probably be incorporated into Mulford Gardens," said Shuldiner, adding that the Mulford Gardens construction will also be delayed. "Given the environment, they're going to probably break it down into stages. They're not going to be able to do the whole site at once."

The Mulford Gardens redevelopment envisioned replacing 550-units of public housing with 469 units of mixed-income housing.

Ellen Lynch, president of the Yonkers Industrial Development Agency, called the Site A derailment a delay, not a cancelation.

"Due to the complicated layering of financing on these affordable projects, they are more vulnerable to kinks in the tricky financial markets right now," she wrote in an e-mailed statement.

Lynch said that besides Site A, the IDA foresees financially induced delays in other affordable-housing developments in which it has a role, including an 86-unit condominium tower at 303 S. Broadway and the Cottage International Development Group's 200-unit proposal at the former Kimball Theatre on Yonkers Avenue.

The housing group Westhab's development plans also reflect tough economic times - it has reduced the size of a proposed 60-unit complex on Ludlow Street by about a third.

"We're seeing a huge gap in our financing," said Robert Sanborn, vice president of real estate development at Westhab. "The funding environment has become intensely more competitive."

Sanborn explained that investors who formerly funded affordable housing have limited their investments, causing a greater number of developers to go after a smaller pot of investors' funds.

Affordable housing developments, like the housing authority's recently completed, $23 million Croton Heights Apartments at 193 Ashburton Ave., depend on tax credits and investors to subsidize the cost of construction so rents are lower than the market-rate would dictate.

Ron Moelis of 326 Riverdale Owners LLC said his company averted losing its financing for a proposed 170-unit building at 314-30 Riverdale Ave. by signing a last-minute, end-of-year agreement with lenders Tuesday night.

"The bank said they were available to close and provide debt and equity, but we had to do it by year's end. Everybody realized that when you have a lender, you have to jump on it," Moelis said of the $51 million, subsidized-rental complex. "I think the deal wouldn't have been viable in the near future."

One massive affordable housing project that has avoided financing delays so far is The Greyston Foundation's proposed 108-unit tower on Warburton Avenue downtown. On Tuesday, Shelley Weintraub, vice president of real estate, wrote in an e-mail that the nonprofit was still working on city approvals for the 16-story structure.

"We do continue to have interest from our lenders and believe that we can close the project and proceed," Weintraub wrote.