Atlantic Development Group
Educational Facility/Commercial Space
120,000 square feet
$11 million, junior subordinated debt financing New Markets Tax Credits
The Boricua College project is the new construction of a 120,000 square foot academic and administrative building for Boricua College in the Bronx. The new building is part of the larger Boricua Village project which includes 700 units of mixed-income housing and retail space and is part of the overall redevelopment of the Melrose Commons Urban Renewal Area. The Boricua college project provides an institution of higher education with a curriculum geared towards an underserved and largely low-income minority population. The college serves as a beacon of higher education and stability in the Melrose Commons neighborhood, which is one of the poorest sections of New York City and the entire country, and has been sorely lacking such an institutional presence.
Enterprise's investment provided a junior subordinate loan enhanced with New Markets Tax Credits (NMTC). The Boricua College development is a now-standard example of Enterprise's ability to help structure and bring to financial closing a highly complex financing involving many different public, private and community development intermediary organizations.
The project's financing sources came from separate construction and permanent New Markets Tax Credit lenders, multiple community development entities provided a total $44.6M in NMTC allocation, an equity investor, and subsidy sources from various city and state agencies including the New York City Department of Housing Preservation and Development, the Bronx Borough President and the City Council. This project signifies Enterprise's third use of NMTC in the borough of The Bronx and its fifth in the state of New York.
The Melrose Commons neighborhood in the South Bronx is one of the poorest areas in New York City, with a 59 percent poverty rate, a median income that is 25 percent of the area median income and an unemployment rate that is 6.53 times the national average. According to a NYC Economic Development Corporation study on the Melrose Commons neighborhood, the population in the area is expected to increase roughly 11-14 percent by 2010, mainly due to the large increase in housing stock created by the Boricua Village project. This makes this area among the fastest growing neighborhoods in New York City.
The College was one of the first new projects in the area and a catalyst for future residential and retail development. Mayor Michael Bloomberg's South Bronx Initiative includes strengthening the commercial corridors of the South Bronx to meet the demand for neighborhood retail and service establishments. The conceptual anchors to this redevelopment are the Boricua Village project and the $500M Gateway Center retail development at the Bronx Terminal Market west of the college, near Yankee Stadium.
Boricua College is the first post-secondary institution in the nation specifically designed to meet the educational needs of students of Puerto Rican and other Hispanic descent. Founded in 1974 as a private liberal arts-focused institution of higher learning, Boricua College is fully-accredited and chartered by New York State, offering associate, bachelor's and master's degrees. Boricua currently enrolls 1,200 full-time students in degree programs. The Bronx campus, at full capacity, can serve an additional 1,800 full-time students, thus raising the total student population to 3,000 students.
During construction, the project created 150 construction jobs. Upon completion, 240 full-time and 100 part-time permanent jobs were created.
Founded in 1995 by Peter Fine and Marc Altheim, Atlantic Development Group is a Manhattan-based developer of residential and mixed-use properties with a specialty in affordable housing. The firm is focused on public/private projects, affordable and market-rate residential properties and mixed-use development. Over the past 10 years, Atlantic has become one of the most active affordable housing developers in New York, with over 4,400 units of housing and 77,000 square feet of retail and community use facilities completed. The vast majority of Atlantic's projects are located in the Bronx, but its portfolio also includes projects in Manhattan and Brooklyn. Atlantic typically contributes equity into transactions, demonstrating its commitment to long-term investment in its projects.
Citi Community Capital (formerly Citibank Community Development), an affiliate of Citibank, provides innovative, comprehensive and cost-effective financing packages for affordable housing and community revitalization projects in locations around the country. Citibank's products meet both the short- and long-term needs of for-profit and nonprofit organizations that build and operate affordable housing, commercial developments and community facilities that benefit low- and moderate-income neighborhoods and populations.
Citibank also leveraged a construction NMTC lender to this project. The Empowerment Reinvestment Fund (ERF), a subsidiary of Seedco Financial, provided permanent financing to the project. Both Citibank and ERF, in addition to Enterprise, provided NMTC allocation to this project.