$160M Rehab and Refi of Bronx Mitchell-Lama Completed

John Jordan | May 2019

One of the Michelangelo Apartments tower buildings in the Melrose section of the Bronx,

NEW YORK—State officials announced on May 29 the completion of the $160-million rehabilitation and refinancing of the Michelangelo Apartments, a 494-unit Mitchell-Lama affordable housing development in the Melrose section of the Bronx.

Michelangelo Apartments was originally built in 1975 and contains four towers with 80 studios, 126 one-bedroom, 191 two-bedroom, 77 three-bedroom and 20 four-bedroom apartments with 50,000 square feet of retail space and underground parking.

The rehabilitation included full kitchen and bathroom renovations, conversion to an energy efficient boiler system, elevator upgrades, facade repairs, upgrades to the lobby and public halls, conversion to energy efficient LED lighting and landscaping improvements.

The New York State Homes and Community Renewal provided nearly $83 million in new tax-exempt bond financing and refinanced and subordinated approximately $34 million in existing debt. HCR’s Federal Low-Income Housing Tax credit allocation will generate $44 million in additional equity for the project. The state’s investment will preserve the project’s affordability, with approximately 397 apartments set aside for households who earn 60% or less of the Area Median Income, and approximately 85 apartments set aside for households who earn 80% or less of the Area Median Income. The development team included MDG Design + Construction, BSR Management, Cary Fields, Raymond James, and Citi Community Capital.

Through the Department of Housing and Urban Development’s Rental Assistance Demonstration program, Michelangelo Apartments will receive Project-Based Section 8 Rental Assistance (PBRA) for 406 units, which guarantees affordability to residents, as eligible households will pay no more than 30% of their income in rent.

“Affordable housing is more than a roof overhead, it is key to building strong and thriving neighborhoods and communities,” Gov. Andrew Cuomo said. “The preservation of Michelangelo Apartments will ensure quality, affordable housing for hard-working New Yorkers and will create more opportunity and growth in the Bronx community for generations to come.”

HCR Commissioner RuthAnne Visnauskas said, “The rehabilitation of Michelangelo Apartments improves the quality of life for approximately 975 current residents and ensures that the development will remain affordable for another four decades. I thank all of our partners for their work and commitment to keeping New York’s housing resources habitable, safe and affordable for decades to come.”

Bronx Borough President Ruben Diaz Jr. said, “Preserving the affordability of our housing stock is key to ensuring that residents in our lowest income brackets can continue to thrive in the communities where they’ve chosen to raise their families. Thank you to Governor Cuomo and to New York State Homes and Community Renewal for your efforts to renovate and rebuild the Michelangelo Apartments and your commitment to maintaining our affordable housing stock.”

The investment in the Michelangelo Apartments is part of Governor Cuomo’s House NY initiative to preserve the state’s stock of aging Mitchell-Lama housing through commitments to long-term affordability and building improvements. The initiative complements the state’s unprecedented $20 billion, five-year housing plan. The plan is a comprehensive approach to statewide housing issues and includes multi-family and single-family housing and community development initiatives to make housing accessible and combat homelessness by building or preserving more than 100,000 affordable homes and 6,000 homes with supportive services.

John Jordan
Editor, Real Estate In-Depth