New York City Housing Development Corporation Approves Financing For First Mixed-Income Development In Brooklyn

Mixed-Income Financing Program Receives National Award

New York, NY, October 25, 2004

The Members of the New York City Housing Development Corporation (HDC) held a meeting today and approved $35.2 million of tax-exempt bond financing and $3.5 million of its corporate reserves to finance the first mixed-income rental apartment building in Brooklyn. This new development, State Renaissance Court, will be located at 200 Schermerhorn Street and will consist of 158-apartments that mix income restricted units for low- and middle-income tenants with market-rate units.

HDC designed the City's first Mixed-Income financing program to encourage the development of economically integrated multi-family residential buildings. Last week, during the National Council of State Housing Finance Agencies (NCSHA) annual conference, HDC received national recognition for this innovative program.

State Renaissance Court is the third building to receive financing through this program and the first to be constructed in Brooklyn. Through the Mixed-Income Program, 20% of the apartments in this development will be reserved for middle-income tenants earning up to 200% of area median income (AMI) or $125,000 for a family of four, 30% of the units are reserved for low-income tenants earning up to 60% of AMI, or $37,600 for a family of four. The remaining units will be rented at market-rate rents.

"HDC's Mixed-Income Program allows us to serve a wider range of economically diverse New Yorkers and allows our resources to go farther," stated Emily A. Youssouf, President, HDC. "We look forward to financing more mixed-income developments as part of the Mayor's housing plan The New Housing Marketplace: Creating Housing for the Next Generation. To-date this program has created over 500 apartments by providing more than $96.7 million in first mortgages through the sale of tax-exempt bonds and $10.5 million through our corporate reserves."

The new development is being constructed on an urban renewal site in downtown Brooklyn, in the Boerum Hill neighborhood. The developer, State Renaissance, LLC, whose principals are John Frezza of Strategic Construction and Samy and Hesky Brahimy of IBEC, was awarded the site through an RFP issued in 2002 by the Empire State Development Corporation. The building will be a mix of studio, one-, two-, and three bedroom apartments.

"Providing affordable housing throughout New York is an important goal," stated Empire State Development Corporation Chairman Charles A. Gargano, "and we are pleased to have worked with the New York City Housing Development Corporation on what will be the first mixed-income rental apartment building in Brooklyn. I commend HDC for the national recognition this innovative program has received."

For the tax-exempt bond transaction, The Federal Home Loan Mortgage Company (Freddie Mac) is providing the direct pay credit enhancement through American Property Financing. This will be secured during the construction phase by a stand-alone letter of credit (LOC) issued by Citibank. Upon construction completion, Freddie Mac will release the Citibank LOC. Through the tax-exempt bond financing, the development is eligible to receive 4% tax credits which will be syndicated by WNC and Associates.

The bonds are expected to be ratted AAA/A-1+ by Standard & Poor's Ratings Services. Merrill Lynch & Co is the Senior Manager and Remarketing Agent for the bond transaction and Bond Counsel is Hawkins, Delafield & Wood.

State Renaissance will be an 8-story, luxury doorman building, with a 72-car parking garage with over 17,000 feet of retail space. Other amenities include a 24 hour concierge service, a laundry room, fitness and recreation rooms and a landscaped outdoor area on the second floor terrace.