Developers of the La Central project in South Bronx, US, have secured funding of $335m for two buildings in the affordable-housing project.
Approved in 2016, the 1,000-unit $600m La Central project is one of the biggest residential developments underway in the city.
Upon completion, La Central will comprise five buildings, a skate park, retail space and a new branch of the YMCA.
The development team comprising representatives from Hudson Companies, BRP Companies, ELH Management, Kretchmer Companies, Breaking Ground and Comunilife has secured the financing from public and private sources for two of the project’s five buildings, scheduled for completion in 2020.
The proposal of tax reform in the US complicated financing on the project and since 2016, it had been depressing the value of tax credits.
Tax credits are purchased by corporations to compensate their tax liability and sold by the city and state to fund affordable-housing projects such as La Central.
By January 2017, companies were paying $1 for each tax credit, compared with $1.20 before the US Presidential election, leaving a massive affordable housing effort such as La Central with a $20m hole in the budget, the developers said.
Hudson Companies principal Aaron Koffman said: “Every penny we lost (on the value of tax credits) was almost a million bucks.
“All of a sudden, we had a $20m hole because of the election.”
The development team managed to cut construction costs by reworking the layout of the project without altering the number of units or the quality of the project.
The team was also able to secure financing from a state programme to further reduce the funding gap and supplement the $100m in tax credits purchased by Wells Fargo.
The project will consist of both affordable- and supportive-housing units.
Other amenities will include a rooftop garden and a large array of rooftop solar panels, which will substantially reduce the buildings’ electricity bill.