Wednesday, July 31, 2013

Buildings on Creston Avenue in University Heights to get makeover from Workforce Housing Advisors

UNIVERSITY HEIGHTS - Several buildings in University Heights will receive makeovers as a result of grants from various city organizations.
Four buildings on Creston Avenue will be improved after years of tenants living in poor conditions. Workforce Housing Advisors, a for-profit developer of affordable housing, took over the properties in 2012. 
Full Story HERE
Courtesy of News12 The Bronx

Friday, July 12, 2013

4 Distressed Bronx Buildings to get $28.6M Rehab

City brokers deal to finance 18 months worth of major work at the badly-deteriorated properties that boast a total of 120 apartments in the borough’s University
Heights section.

Four distressed Bronx buildings will be undergoing long-overdue renovations, thanks to a financing deal the city brokered with the buildings’ new owner.

The buildings, located at 2239, 2241, 2323 and 2333 Creston Ave. in the University Heights section of the Bronx, were all in the city’s Alternative Enforcement Program, which targets 200 especially distressed buildings every year. Workforce Housing Advisors, a for-profit developer of affordable housing, took over the properties in 2012, after the previous owners had racked up more than 1,000 violations and defaulted on their mortgage.

The rehabilitation will cost about $28.6 million, which comes from a combination of Low-Income Housing Tax Credits, city Department of Housing Preservation and Development loans, city Housing Development Corp. bonds and Reso-A funding secured by the City Council Speaker Christine Quinn.

“The preservation of four distressed Creston Avenue homes shows what it is possible when tenants, organizers, banks, developers and the City work together to bring positive changes to their communities,” said Ms. Quinn in a press release.

JPMorgan Chase and Morgan Stanley are the Letter of Credit providers.

“This is a great resolution both on the advocacy side and the finance side,” said John Crotty, a founding member of Workforce Housing Advisors.

Rehabilitation of the four buildings, which have a total of 120 apartments, will begin this summer. The work will include installation of a new roof, new boilers, new plumbing, leveling apartment floors and installing beams. The process is expected to take about 18 months, during which time the tenants will be housed elsewhere.

“To be able to have a really responsible, preservation-minded developer, in addition to stabilizing the neighborhood, it gets these tenants out of a cycle of irresponsible ownership. It gets tenants ownership they can trust,” said a spokesman for the Department of Housing Preservation and Development.

The building’s deteriorating condition led to high vacancy – 41 of the 120 units were empty, said Sara Dabbs, a director at the Department of Housing Preservation and Development. Once the rehabilitation is complete, those apartments will be rented to families earning up to $51,000 for a family of four.

Current tenants will not see a rent increase, she said.

Monday, April 29, 2013

Hope Grows on Kelly Street

By Angely Mercardo
A year ago, nothing Jessica Morales did could keep the smell of rotting garbage out of her Kelly Street apartment.

The stench of garbage piled in the hallways of the 30-unit building at 935 Kelly Street seeped under her door.

“I lit candles and cleaned, but nothing worked. The inside always smelled like the hallways,” Morales said.

Today, she uses the candles to decorate her refurbished living room. The only odor that greets a visitor is a subtle combination of air freshener and furniture polish. New hardwood floors gleam.

Once, the building was infested with “rats that looked like cats,” Morales said. Junkies squatted and garbage was strewn all over the halls.

But in 2011, after the community development organization Banana Kelly Improvement Association and the Longwood-based advocacy organization Mothers on the Move helpedorganize the tenants at 935 and four neighboring buildings on Kelly Street, the foreclosed properties were purchased by Workforce Housing Advisers, which specializes in renovating troubled buildings. It retained  Banana Kelly as a partner in the project to provide  support services to the residents and Winn Management to provide property management services.

Residents began moving into temporary housing in January 2012. They began moving back this spring. Workforce Housing and Banana Kelly held a ribbon-cutting ceremony on March 21.

It was amazingly quick,” said Harry DeRienzo, the president of Banana Kelly about the process. “Once we had our partners in place, after that went through it took 16 months.”

“I didn’t want to come back at first, “said Morales. “I went through a lot of things here.”

Despite the nightmarish memories, Morales returned with her 13 year old daughter on March 7, and has since fallen in love with the new kitchen and how sturdy everything is.

Filbys Arzu, lives in a second floor apartment with her three children. Before Banana Kelly and Workforce took over, she said, “You could count up to 12 rats running around inside the apartment in one day.”

But for her, the vermin wasn’t the worst; living with fear was.

“There weren’t any locks on the front door. Anyone could just come in and hang out inside the building,” she said.

“The guy that owned this building belongs in jail,” said DeRienzo of the ousted owner who allowed the building to deteriorate for so long. “He lost his building, so he probably feels like he was held accountable,” he said. But he was able to take out $5 million in mortgages. “None of that money went into the building,” DeRienzo continued. He’s “probably a millionaire now.”

In 1996, the buildings at 916, 920, 924, 928 and 935 Kelly carried a mortgage of $684,000. A series of refinances followed, each increasing the owner’s indebtedness. In 2009, Ridgewood Savings Bank granted a new loan of $5 million, according to city records.

Despite the infusion of cash, the buildings continued to deteriorate. At the ribbon-cutting, Marie Graziano, a coordinator at Banana Kelly, said that she has seen other buildings that had deteriorated, but she has “never seen anything as bad as 935.” Con Edison wasn’t even able to go into the basement because of “puddles, sewage and rats,” she said.

“There were people taking insulin and the refrigerators were not working. We had to take care of those right away,” said Graziano.

Both she and Kevin Gallagher of Workforce Housing Advisors recalled a woman with a new born baby and no heat in her apartment. “She had no living room window and only a blanket to keep out the cold,” said Gallagher.

Now, the 30 apartments in 935 Kelly St. are being filled with hopeful tenants. Since moving back in, Arzu has a new found peace of mind. “They changed everything,” she said. “I feel as if I’m in another building altogether.”

At the ribbon-cutting, several residents expressed their gratitude toward Banana Kelly.

Miranda Sills, told the crowd of living with “no fridge, no stove and no power.” Now, thanks to the renovations, Sills is eager to move in and enjoy her apartment.

Morales stepped forward and addressed the crowd with a shy smile. “Compared to what I had before,” she said, “I have a mansion now.”

Monday, April 15, 2013

CPC, Citi Announce $250M Facility to Finance Affordable Housing

By Affordiable Housing Finance Staff

The Community Preservation Corp. (CPC) announced that it has secured $250 million in financing from Citi for the construction, rehabilitation, and preservation of affordable housing in New York.

The capital will help finance the creation or preservation of nearly 6,000 units of low- and moderate-income housing throughout the state, including the construction of approximately 3,000 affordable apartments in New York City. It will also be used to help in the Hurricane Sandy recovery.

The financing is one of Citi's largest one-time investments in affordable housing.

"We are proud of our affordable housing financing achievements, and Citi is extremely pleased to support CPC on this very important initiative," said Andrew Ditton, co-head of Citi Community Capital, in a statement. "This milestone underscores our commitment to responsible finance, and we will continue to play an active role in preserving and revitalizing the communities we serve."

CPC, a nonprofit mortgage lender for multifamily affordable housing, said $100 million will be set aside for the creation or preservation of homes in New York City. For these deals, the New York City Department of Housing Preservation and Development (HPD) will provide supplemental construction and permanent financing, and the New York City Housing Development Corp. will provide 10 percent credit enhancement.

"This initiative will provide much needed capital for affordable housing in communities across New York City and state and reflects CPC's renewed focus on our core mission of creating sound rental housing for lower-income families and rebuilding communities," said Rafael E. Cestero, CPC president and CEO.

Officials said the unique collaboration draws on the strengths of the participating institutions and brings together tools that allow for low-interest rate lending to developers of affordable housing. In keeping with NYC's Greener Greater Buildings Plan, all of the properties financed under this program will be benchmarked for energy usage and retrofit for energy savings. All buildings burning No. 6 fuel oil will be converted to comply with the city's Clean Heat initiative.

New York, where the fair market rent for a two-bedroom apartment is $1,313, continues to rank among the most expensive states to live. The National Low Income Housing Coalition reported this week that a household must earn $52,513 a year to afford this rent without paying more than 30 percent of its income on housing costs. A minimum-wage worker would have to work 139 hours per week to afford the fair market rent or a household must have 3.5 minimum-wage earners working 40 hours per week year-round to make the two-bedroom rent affordable. The cost is even more in the New York City metro area.

The renovation of 539-541 E. 147th St., an over leveraged property in the Bronx, is the first transaction to close under this new facility. The project includes two occupied 10-unit buildings owned by Workforce Housing Advisors, a for-profit affordable housing development firm that specializes in preserving distressed multifamily real estate in the New York metropolitan area. Financing for this $4 million project includes a $1.59 million construction and permanent loan from CPC and Citi with HPD providing $2.4 million in city capital funds.

A portion of the $250 million in financing will support the Storm Recovery Loan Fund, a pilot program to provide up to $40 million in low-cost loans to fund the repair of multifamily buildings damaged by Hurricane Sandy. Building owners can put the funds toward resiliency measures, like installing state-of-the-art heating and electric plants that are repositioned to withstand the next storm by being located on higher floors and/or in waterproof compartments. This focus on mitigation will decrease the cost of recovery and reduce the destructive impact of future storms. The program will also promote green improvements that will conserve energy and save money over the long term. The new fund blends a subsidy from HPD with CPC financing to provide loans that are below market rate, allowing owners to make needed repairs in the aftermath of Sandy.

Officials added that the funding will help provide financing for Mayor Bloomberg's New Housing Marketplace Plan, a multi-billion dollar initiative to finance the creation and preservation of 165,000 units of affordable housing by the close of fiscal 2014.

WFHA, HPD, CPC, Speaker Quinn, UHAB and New York Community Bank Announce Beginning of Gut Rehab for Troubled South Bronx Buildings

NYC Housing Preservation and Development (HPD) Commissioner Mathew M. Wambua, Council Speaker Christine C. Quinn, Workforce Housing Advisors (WFHA) , Community Preser vation Corporation (CPC) President /CEO Rafael E. Cestero, the Urban Homesteading Assistance Board (UHAB), and New York Community Bank announced the beginning of what will be a gut renovation of two multi - family residential buildings in the South Bronx. Loc ated at 539 - 541 East 147 th Street in Bronx Community Board 1 , the previous ownership had allowed the buildings to fall into severe physical and financial distress, forcing the tenants to live in deplorable conditions. As part of a comprehensive effort, Wor kforce Housing was able to purchase the buildings from New York Community Bank through the innovative “First Look” initiative, and recently closed on a $4.7 million financing package with HPD and CPC that will allow the properties to be renovated and which will also ensure that they remain affordable to the current tenants.

Financing the rehabilitation and preservation of the Mott Haven 147 th Street buildings is part of Mayor Michael R. Bloomberg’s New Housing Marketplace Plan (NHMP), a multibillion dollar initiative to finance 165,000 units of affordable housing for half a million New Yorkers by the close of the 2014 fiscal year. To date, the NHMP has funded the creation or p reservation of more than 144,700 units of affordable housing across the five boroughs. More than 44, 450 units have been created or preserved in the Bronx with more than 7,913 of those units in Bronx Community Board 1. For every dollar invested by the City, the Plan has leveraged $3.43 in additional funding for a total commitment of more than $21 billion.

“HPD is proud to lend $2.5 million to fund the rehabilitation of these properties, and to help ensure that the tenants will have safe, clean and affordable homes for decades to come ,” said HPD Commissioner Mathew M. Wambua. “That a new, responsible owner is in place and the rehab work is on pace to start is a testament to a model of preservation that is a proven winner. Wh en so many different stakeholders all work together to affect a change in ownership and make a substantial financial commitment to the long - term stability of these properties, the real winners are the families who will have better lives and peace of mind.”

“This deal is an example of what the City can accomplish when we work together to protect tenants’ homes,” said Speaker Christine C. Quinn . “The 'first look' agreement we reached with New York Community Bank ensures the City and good developers get first crack at purchasing loans and preserving buildings, and I thank Workforce Housing Advisors, UHAB and HPD for their hard work to save these homes.”

“539 - 541 is a collaboration between the private sector and the government to create real change,” said John A. Crotty, Partner of Workforce Housing Advisors . “These partnerships succeed because all of the parties in this deal want to tackle these types of problems in the NYC residential market . We at Workforce commend the entire team on their efforts to make thi s happen. We think the result will be transformative not only for the families of 539 and 541 but for the Mott Haven neighborhood as well.”

“Investing in overleveraged and distressed properties is at the core of CPC’s work to revitalize neighborhoods and to maintain the affordability of homes throughout New York City, and this project is an excellent example of how the collaboration of public and private partners can truly drive those goals , ” said Rafael E. Cestero, President and CEO, The Community Preser vation Corporation . “ As a result of the diligent work of t he City, the Speakers Office, HPD, Workforce Housing Advisors, UHAB and New York Community Bank, the Mott Haven 147 th Street buildings will be fully renovated and remain affordable to its residents .”

Workforce Housing Advisors purchased these two Bronx buildings from the New York Community Bank in October 2011 as part of the First Look initiative. First Look is a program developed in partnership with the City Council and Speaker Quinn, HPD, and ten ant/ housing advocacy organizations which ask local banks to provide responsible preservation - minded developers with an early opportunity to purchase distressed multi - family properties in foreclosure. New York Community Bank was one of the first lenders to sign on to the initiative.

“NYCB is proud to work with Workforce Housing Advisors, HPD, UHAB, and our other 1st look partners. Workforce has a fantastic record of turning distressed assets into quality affordable housing. They have been a great resource for the bank, especially when the lengthy foreclosure process in NY has negatively impacted living conditions, as was the case with these buildings. The bank believes that collaboration between Workforce, HPD, CPC, and UHAB on 539 - 541 East 147th St. will yield a successful rehabilitation of the buildings, and ensure the preservation of these units as permanent affordable housing.”

Immediately upon taking title, WFHA began a dialogue with the tenants and UHAB , one of the city’s most established tenant advocacy groups who had been working with the tenants in the se properties for some time prior to the purchase. UHAB counseled the tenants through the receivership period and continued to do so after WFHA took title. UHAB will continue in both an org anizing role and as title holder of the properties.

“ The tenants in these buildings were living in uninhabitable conditions ,” said Kerri White Co - Director of Organizing and Policy at UHAB, “ The conditions only deteriorated further during the foreclosure . Mold, leaks, collapsing ceilings and electrical fires had all plagued the families living here. These tenants along with residents from other buildings in foreclosure had long been organizing, with the assistance of their elected officials, to get NYCB t o sell these overleveraged foreclosure buildings to good developers who would make the needed repairs and preserve affordability. Without the creativity of WFH and the City, these buildings would have been lost. ”

At the time of the WFHA purchase, the bui ldings had over 300 hazardous and immediately hazardous violations issued by HPD . The physical conditions had significantly deteriorated , putting the health and safety of the tenants at risk . The buildings have substantial water penetration due to deterior ated masonry and mortar, there are large amounts of mold and mildew that must be remediated, and many of the major building - wide systems require replacement.

These conditions require considerable physical upgrade that will be addressed through the rehabilitation financing including the installation of a new roof, new windows, new plumbing, electric and heating systems as well as approximately 50% beam replacement. The rehabilitation plan will also include layout ch anges. The buildings were built in approximately 1898 with a railroad apartment configuration with only one private bedroom. In order to efficiently use the space the units have been reconfigured to create two private bedrooms. Since this is a substantial rehabilitation, WFHA has provided for the temporary relocation of the tenants during the 18 - month construction period.

The total development cost of this rehabilitation project is approximately $4.7 million. HPD is providing $2.4 million in subsidy, CPC is providing a construction and permanent loan of $1.64 million, and the remainder is being funded with equity from WFHA. Prior to the commencement of construction, HPD and the City Council worked to facilitate an Article XI tax exemption , which will help defray long - term costs and thus help to subsidize the affordability of the apartments.

539 - 541 E ast 147 Street is comprised of two adjacent properties located in the Mott Haven section of the Bronx. Each buil ding contains 10 residential units plus a superintendent’s unit in the basement. The buildings are classified as Old Law tenements and were built in 1898 with railroad layouts. The properties were acquired by WFHA in October, 2011 from New York Community B ank. NYCB had acquired the buildings in a deed in lieu of foreclosure sale immediately prior to the WFHA transaction .

These buildings are a continuation of WFHA’s business plan to repurpose distressed multifamily buildings in New York City to help creat e change where it is most needed, and WFHA’s second rehabilitation loan with CPC.

Photos of the units can be found here:

Monday, August 6, 2012

Development group announces request for proposals for healthy food business in renovated Bronx slums (NY Daily News)


"Kelly Street Green" project would offer grants, free apartment, access to local produce


FRIDAY, AUGUST 3, 2012, 6:00 AM

Kelly Street Restoration is developing  five troubled apartment buildings on Kelly St.  in Longwood.


Kelly Street Restoration is developing five troubled apartment buildings on Kelly St. in Longwood.

Wanted in the Bronx: entrepreneur to convert notorious slum into fresh food enterprise.

The development group behind the renovation of five buildings on Kelly St. is looking for an individual or organization to open a new business there, such as a healthy takeout restaurant, it announced Thursday.

Kelly Street Restoration has released an unusual request for proposals for 2,822 square feet of revamped commercial space at 935 Kelly St., with frontage on bustling E. 163rd St. in Longwood.

The applicant the development group selects will lease the space at a substantial discount - $7 per square foot or roughly 1/4 of market rate - and benefit from up to $150,000 in grants and loans to cover startup expenses.

It will also gain access to fruits and vegetables grown at a new community garden behind the buildings and farms upstate. Lastly, the selected operator will score a rent-free apartment at 935 Kelly St, plus mentorship from successful Manhattan restaurateurs.

Kelly Street Restoration hopes to select a local go-getter with a small bank account and a big heart, said John Crotty of Workforce Housing Advisors, 1/3 of the development group.

Longwood needs a new type of business that caters to busy working people who want to eat healthy, he said. The project is called "Kelly Street Green."

"We want to take someone on a well thought-out gamble, someone who understands that this will require effort and commitment and someone who can be an agent for change," Crotty said.

That someone could be Darada David. For two years, the Bronx native ran a tiny restaurant, health food store and Internet café sandwiched between bodegas and fast food joints on Melrose Ave. near the Hub.

PeaceLove Café hosted live jazz and poetry slams, and served tasty sweet potato pie. But the cafe closed last August because David could no longer make rent.

"That type of business in the Bronx needs a lot of support," said David, who will think about applying for the Kelly St. space. "Sometimes a feel-good business makes less money, but it does a lot for the community."

Kelly Street Green is the cherry atop a $16 million residential overhaul that began in January.

Workforce Housing Advisors, Monadnock Construction and Banana Kelly Community Improvement Association, a nonprofit, are rebuilding 916, 920, 924, 928 and 935 Kelly St., some of the worst slums in the borough.

For years, tenants in the gritty walkups lived with broken windows, leaks, rats and roaches, and went without heat. The tenants are living elsewhere during the renovations but will keep their old rents when they move back.

The new business will replace a Chinese takeout restaurant, nail salon and discount store that all closed this past winter. To learn more, visit

Read more:

Tuesday, June 12, 2012

World's Greatest Bank Finances Project for One of NYC's Leading Affordable Housing Providers

Morgan Stanley Provides Financing to Kick-Start Preservation of Distressed Residential Buildings in the Bronx. Financing Will Help Four of New York City’s Most Distressed Multi-family Residential Properties to Undergo Eventual Rehabilitation.        

Morgan Stanley (NYSE: MS) has provided multi-million dollar interim financing to Workforce Housing Advisors, Inc. (WFHA) to make possible the rehabilitation of four multi-family buildings with 120 units in the Bronx.

The four buildings, located at 2239, 2241, 2323 and 2333 Creston Avenue, have deteriorated significantly in recent years, amassing building code violations, as well as municipal liens and fines.

The buildings, which are occupied, have been placed in the New York City Department of Housing Preservation and Development’s (HPD) Alternative Enforcement Program, which annually targets the 200 most distressed multi-family residential properties in the City for intervention.  WFHA, in partnership with the NYC Partnership Housing Development Fund Company Inc., a not-for-profit housing development fund company, has taken ownership of the buildings.

The interim financing provided by Morgan Stanley allows WFHA to pay down the municipal arrears and move forward with preparations to renovate the buildings.  HPD expects to provide a low-interest loan through its Preservation Participation Loan Program, in conjunction with more conventional financing and Low Income Housing Tax Credits, to fund the rehabilitation of the properties and preserve them as affordable for current and future tenants.  In the last two years, this type of public-private financing in partnership with HPD has stabilized 1,500 units in comparably distressed and overleveraged properties, effectively preserving the housing as affordable over the long term.

“We appreciate Morgan Stanley's leadership in stepping up to partner with us on this project,” said John A. Crotty, founding partner of Workforce Housing Advisors.  “Their support will allow us to take the critical first step of a long-term process to transform four buildings in the Bronx in significant need of rehabilitation and make a substantial difference in the lives of the working families who reside there.”

Said Audrey Choi, Head of Global Sustainable Finance at Morgan Stanley: “We are committed to supporting affordable housing in our communities.  We see this as a unique opportunity to improve the living conditions of families and individuals in need of sound, affordable housing in the Bronx.”

Part of the financing provided by Morgan Stanley allows for payment to the City of three-quarters of a million dollars to clear liens due to unpaid taxes, municipal charges and emergency repair expenditures.  Without the new financing, the high holding costs would have continued to burden the properties, further delaying the shift to rehabilitation.

“It takes many steps and many partners to rescue and restore distressed affordable housing,” said HPD Commissioner Mathew M. Wambua.  “The buildings on Creston Avenue have miles to go before their tenants will be able to feel comfortable and secure.  But we are on the right path – and welcome Morgan Stanley as a new partner in our ongoing efforts to preserve the City’s existing multi-family housing stock.  The financing they have provided has kick-started the turnaround process, and that is a commitment for which we are gratified.  More importantly, by making this commitment, they agree as we do, that financing housing in our City is a very sound investment in our collective future.”

In the last two years, HPD financing has stabilized 1,500 units in distressed and overleveraged properties, including two other transactions with Workforce Housing Advisors, with 174 more distressed units slated to begin construction by the start of the summer.

About Morgan Stanley
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,300 offices in 43 countries.  Since 2006, Morgan Stanley has executed more than $5 billion in loans and investments to strengthen underserved communities.  For further information about Morgan Stanley, please visit

About the NYC Department of Housing Preservation and Development (HPD)
HPD is the nation’s largest municipal housing preservation and development agency.  Its mission is to promote quality housing and viable neighborhoods for New Yorkers through education, outreach, loan and development programs and enforcement of housing quality standards.  It is responsible for implementing Mayor Bloomberg’s New Housing Marketplace Plan to finance the construction or preservation of 165,000 units of affordable housing by 2014.  Since the plan’s inception, more than $19.4 billion has been invested or leveraged by the City to finance the creation or preservation of more than 130,606 affordable homes.  For more information, visit

About Workforce Housing Advisors
Workforce Housing Advisors operates in the multi-family real estate market in the New York metropolitan area by repositioning distressed assets as affordable housing resources.  It works collaboratively with for-profit, not-for-profit and government partners to execute redevelopment plans for properties that had previously been subject to financial and physical distress.

Contact: Media Relations, Sandra Hernandez, 212.761.2446