AFFORDABLE HOUSING FINANCE subscribers voted on the winners in each of the 10 categories as well as the best overall development out of 35 finalists that appeared in the July/August issue.
Highlights from AHF's 2008-2009 Readers’ Choice Awards include: Spring Creek Gardens in Brooklyn, developed by The Domain Cos. and The Arker Cos. in the "Preservation" category, and The Preserve New Orleans, developed by The Domain Cos. in the "Urban" category.



Saved from the Boom
SPRING CREEK GARDENS

Developers: The Domain Cos. and The Arker Cos.
Major Funders: New York City Housing Development Corp.; New York City Department of Housing Preservation and Development; New York State Division of Housing and Community Renewal; New York State Energy Research and Development Authority; Centerline Capital Group; Bank of America

BROOKLYN, N.Y. To keep hundreds of apartments at Spring Creek Gardens affordable, developers had to fight off a string of speculators who saw an opportunity to raise the rents.
“We were able to snag it away from the market-rate buyers,” says Matthew Schwartz, principal with The Domain Cos.

Today, 492 of the 582 apartments at Spring Creek are reserved for households earning up to 60 percent of the area median income. But at the height of the real estate boom, Spring Creek’s owner was hoping to sell the community, which had originally been built in 1989 with low-income housing tax credits (LIHTCs). The owner had already raised the rents on close to a hundred of Spring Creek’s apartments by as much as $400 a month.

Development partners Domain and The Arker Cos. paid $16.9 million in 2006 for Spring Creek, or $29,000 per unit. They also spent $42,000 per unit to improve the buildings. That included peeling off cracked “panelized” façades and repairing extensive water damage underneath. The developers also decked out Spring Creek’s community spaces with new computers, pool tables, and flat-screen TVs—along with a suite of programs from tutoring and mentoring to games and social gatherings.

The developers paid for the $52.7 million plan with a tax-exempt bond mortgage and $16.6 million from the sale of 4 percent LIHTCs, plus grants and seller financing.

Spring Creek also became more energy efficient thanks to $2 million in funding from the New York State Energy Research and Development Authority and the state’s Weatherization Assistance Program, one of the largest combined awards ever given to a single project.

Better security and enforcement of the building rules also made Spring Creek a safer place to live, as the apartments went from being 85 percent occupied to being full with hundreds of people on the waiting list. —Bendix Anderson



New Orleans Revival
THE PRESERVE NEW ORLEANS

Developer: The Domain Cos.
Major Funders: Centerline Capital Group; Bank of America; Freddie Mac; City of New Orleans; Louisiana Housing Finance Agency

NEW ORLEANS, LA. The Preserve is one of the first mixed-income projects built in the city since Hurricane Katrina. Providing 183 units of needed housing, the development contributes to the overall recovery of New Orleans, says developer Matthew Schwartz, a principal at The Domain Cos.

The Preserve replaces the Crystal Hot Sauce plant that was destroyed by the hurricane four years ago and is a catalyst in the revival of Tulane Avenue in the Mid-City neighborhood. The city has contributed more than $1.4 million to rebuild the streets and infrastructure surrounding the project.

With The Preserve, Domain has also introduced a mixed-income housing concept that has been relatively untested in the market, according to Schwartz.

The development features 74 affordable apartments for households earning between 30 percent and 60 percent of the area median income and 109 marketrate units. This 40/60 percent mix was designed to serve the different incomes represented in the surrounding area. In addition, 5 percent of the units are set aside as permanent supportive housing with services.

The affordable units were oversubscribed prior to the development’s completion at the end of 2008, and the market-rate units were leased within 90 days of opening.

One of the challenges was the hesitancy of investors and lenders to put money into New Orleans. Domain leveraged its existing relationships to bring in a core group of investors to the city, where it hosted several “road shows” to build confidence in the market. The firm raised more than $100 million for three low-income housing tax credit projects.

A $43.2 million development, The Preserve was financed with about $16.5 million in tax credit equity from Centerline Capital Group and nearly $16 million in Community Development Block Grants. Bank of America and Freddie Mac provided an $8.5 million mortgage. —Donna Kimura