Organization Name: Hudson Valley – MDG (Development partnership between Hudson Valley Property Group, LLC and MDG Design + Construction); Forsyth Street Advisors (Financial Consultant)
Project Title: Marien-Heim Tower
Project Location: 870 Ocean Parkway, Brooklyn, NY (Midwood, Brooklyn)
The primary goal was to preserve the long-term affordability of the 182-unit Marien-Heim Tower through a tax credit investment, refinance, and Rental Assistance Demonstration (RAD) conversion that would fund the property’s renovation. The developer worked closely with the nonprofit owner to ensure that the owner’s and residents’ needs were prioritized: the existing ownership and management team remained in place, and no residents were displaced.
Another goal was to expand the social resources available not only to Marien-Heim’s residents, but to the larger Brooklyn community. The transaction allowed the nonprofit to receive a substantial cash-out to finance the ongoing building operations and further the organization’s mission both at Marien-Heim and throughout the community. This includes renovations to the senior center, which is operated by the Senior Citizens League of Flatbush and open to the community.
New York State HFA-issued tax-exempt bonds and 4% low income housing tax credits funded the $53MM project. The property participates in HUD’s RAD program and benefits from decoupling the remaining interest reduction payments to generate additional proceeds for the project. HVPG-MDG was the first developer in New York to utilize the innovative “back-to-back” financing structure in collaboration with HFA and Citibank that decreased transactions costs and allowed the nonprofit to retain management and long-term involvement with the property. The extensive $16MM tenant-in-place rehab addressed the sustainability, quality of life, and modernization of the property. Common area improvements included full renovations and the beautification of: the main entrance (new automatic doors), lobby, indoor and outdoor lounge areas, management office, community room, and building hallways. Unit renovations included new kitchens, bathrooms, unit flooring, paint and private balcony doors.
One of the most notable impacts of the project is the energy savings achieved through green building improvements, which included, among others, switching from an oil boiler to a high-efficiency gas boiler, adding energy efficient lighting, and updating windows throughout the building. Marien-Heim has saved $50K in energy, electric, gas, and water spending combined in the most recent year. Overall energy, gas, and water usage has decreased by 19%.
Improving resident quality of life and community resources were a priority for the project. The senior center, which offers exercise and educational classes as well as a kosher lunch for neighborhood seniors, was extensively renovated. Residents have applauded the renovation, noting how comfortable they are in their newly renovated homes: “I feel like I don’t even want to go out anymore,” says Felice Nastri, who lives in one of the tower’s apartments. “I want to stay here all of the time.”
Hudson Valley Property Group (www.hvpg.com) is a New York based owner and developer of affordable housing. Its mission is to provide quality, well-managed housing to the communities it serves through investment in and rehabilitation of affordable housing. HVPG is a triple-bottom-line business that focuses on the environmental and social impact of its projects. The group takes a flexible approach to working with not-for-profit owners, prioritizing the needs of the residents and organization. MDG Design + Construction (mdgny.com) is a leading real estate firm that develops, constructs, and manages high quality affordable housing. With nearly 30 years of excellence, MDG is the industry leader in occupied rehabilitation. MDG specializes in the new construction and rehabilitation of residential buildings across New York City and Long Island. MDG has completed and is currently in progress on over 17,000 units for a total of over $1.6 billion.