Case Study
Financing housing with supportive services, through mixed- financing including bonds, tax credits, loans and grants
Photo Credit: Curtis + Ginsberg Architects LLP
ShermanLaw has represented The Fortune Society, a nonprofit social service and advocacy organization, in multiple development projects. The Castle I and Castle Gardens projects are located in West Harlem; ShermanLaw represented Fortune in both of these developments.
Castle Gardens II created a large number of supportive affordable housing units for formerly incarcerated men and women, together with additional space for community development.
The complex sources of financing for the projects required significant guarantees from the developer. To minimize risk, Fortune partnered with Rose Company, as co-developer. ShermanLaw negotiated the joint venture development agreement between the Fortune Society and Rose. ShermanLaw worked closely with Fortune to advise it of the following: risks in the transactions; assisting them in determining which risks were inherent in the Project and necessary to assume in carrying out their mission; and which risks could be better absorbed by the private developer. Through a lengthy process, ShermanLaw negotiated a development agreement which allocated risks, responsibilities and remuneration in an acceptable manner to both parties.
ShermanLaw created a legal structure to maximize the tax credit equity and tax exempt bond proceeds for the Project and also negotiated terms for (and closed on) $44 million in financing required by the Fortune Society and its partners to undertake this important, major development. ShermanLaw brought its broad and extensive expertise to negotiations concerning multiple sources of private corporate, non-profit, federal, state, and city funding, including:
- Low Income Housing Tax Credits (LIHTCs) equity
- Federal HOME loans
- NYC Department of Housing Preservation and Development (HPD) loan
- NYS Homeless Housing Assistance Program (HHAP) grant
- Resolution A funding from the Manhattan Borough President’s Office grant
- Fund to Advance New York City grant
- NYS Housing Finance Agency (HFA) tax exempt bonds
- Capital One credit enhancement
- Corporation for Supportive Housing financing
- Enterprise Green Communities grant
- Federal Home Loan Bank of NY loan
- Home Depot grant
Photo Credit: Curtis + Ginsberg Architects LLP
The completed project provides 114 affordable one-bedroom and 50 studio rental apartments for very-low and low-income formerly incarcerated men and women seeking to rebuild their lives, and on-site supportive services. Castle Gardens is a community development anchor as well as a supportive housing facility for a vulnerable population. Designed and built to meet LEED standards, including ‘green’ sustainable LEED-rated materials, Castle Gardens features an additional 20,000 square feet of office, meeting and community space to help serve Fortune’s clients and neighborhood residents.
Case Studies Index