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LISC NYC and the National Equity Fund recently celebrated the closing of Phase 1 of BK Union, a joint venture between Banana Kelly Community Improvement Association (Banana Kelly) and the Joint Ownership Entity NYC (JOE NYC) to preserve five Bronx buildings comprising 124 units of affordable housing.
This portfolio of buildings was initially brought under Banana Kelly’s ownership over twenty years ago through a city program called SIP, a turnkey program to develop city-owned vacant properties into housing for formerly homeless individuals and families. As a mission-driven landlord, Banana Kelly was committed to maintaining both quality housing and affordability for the residents. As a result, even as rents in the Bronx have continued to rise along with housing costs, decades later most of the initial residents remain in the apartments with affordable rents.
But maintaining these buildings came at a cost to Banana Kelly. Over time as the buildings aged, Banana Kelly was forced to make multiple stopgap repairs. As a result, rather than providing cash flow to enhance Banana Kelly’s range of community services, the buildings became a financial drain on the organization.
Enter New York City’s Department of Housing Preservation & Development (HPD), which committed significant resources, including Low Income Housing Tax Credits, to fully rehabilitate the buildings. Going forward, Banana Kelly will co-own these properties with the JOE NYC, a collaboration of community development corporations that will allow for more scaled approaches to asset management. As an example, JOE NYC has arranged for the installation of solar panels on the BK Union buildings, alongside other properties under JOE NYC ownership, which will bring about environmental sustainability and further financial stability to the project. “JOE NYC was created by Banana Kelly and other leading CDCs to ensure the long term sustainability and affordability of their housing projects. The new solar panels at BK Union buildings are an example -- almost all common area electricity will be produced by them. LISC’s support of JOE NYC since day one, and their work on this project, is what makes such innovations possible,” stated Peter Madden, executive director of JOE NYC.
LISC NYC's role in the project was to provide financial modeling technical assistance to Banana Kelly, prepare a successful application for Low Income Housing Tax Credits from HPD, and deliver project management support to bring the project to construction closing. National Equity Fund syndicated the tax credits in partnership with Sterling National Bank.