Acquisition of Distressed HUD-Subsidized Building Paves the Way for Preservation as Affordable Housing

FOR IMMEDIATE RELEASE
Contact:  Sarah Hovde – Research and Policy Analyst
LISC NYC
(212) 455-9375
shovde@lisc.org

NEW YORK, NY (August 15, 2008) – LISC NYC is pleased to announce the July 31, 2008 closing of a loan from the New York City Acquisition Loan Fund, which financed the purchase of a 52-unit residential building by the Bridge Street Development Corporation (BSDC), a community development corporation serving Brooklyn’s Bedford-Stuyvesant neighborhood.  The building, located at 300 Putnam Avenue, is federally subsidized, and had fallen into severe disrepair under prior ownership, prompting the U.S. Department of Housing and Urban Development (HUD) to foreclose.  It’s acquisition by BSDC paves the way for its rehabilitation and preservation as affordable housing for current and future tenants.

The path to preservation of this important housing resource has been a long one.  BSDC assumed management of the severely distressed property when it was appointed the “7A administrator” by a housing court judge in the fall of 2006.  By that time, the building had fallen into serious disrepair and lacked essential services.  BSDC was able to restore essential services and make some emergency repairs, using its own resources and the City’s Emergency Repair Program.  LISC NYC also made early loan and recoverable grant funds available to BSDC for building stabilization and pre-development. 

The HUD foreclosure process culminated in a foreclosure auction in December, 2007, at which BSDC was the sole bidder for the property.  This was the first instance of a preservation-oriented nonprofit directly purchasing a property via HUD foreclosure auction in NYC.  The successful preservation of the housing was due at least in part to close collaboration between the City, HUD, the nonprofit developer, LISC NYC and the Acquisition Loan Fund.  South Brooklyn Legal Services provided the tenants with legal representation during the process; The Urban Homesteading Assistance Board (UHAB) and Tenants & Neighbors, who assisted with strategizing and tenant education about the process, were also key players.

BSDC is planning extensive renovations to the building – including electrical and plumbing rehab, a new roof and elevators, and work inside apartments  – which are expected to be funded through an allocation of 9% Low Income Housing Tax Credits and additional financing through HPD’s Preservation Loan Program.  Construction financing is being provided by Banco Popular.  The project will retain its federal Project-Based Section 8 rent subsidy contract, which will enable it to continue serving very low-income tenants.

Bridge Street Development Corporation (BSDC) was established in 1995 by the Bridge Street AME Church, located in Brooklyn’s Bedford-Stuyvesant neighborhood, and one of the oldest Black congregations in the City.  BSDC's mission is to develop safe, attractive and affordable housing for families and individuals of all income levels; create and retain neighborhood retail businesses that provide the community with jobs, goods and services; and to educate residents, particularly youth, on the fundamentals of business and home ownership.

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LISC New York City combines corporate, government and philanthropic resourcesto help revitalize neighborhoods. For more information, visit www.lisc.org/nyc

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