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 www.morganstanley.com.
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 www.nyc.gov/hpd.
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
