Starrett City Refinancing Completed

ALBANY, NY (12/16/2009)(readMedia)-- State Housing Commissioner Deborah VanAmerongen today announced that refinancing has been finalized at the 5,881-unit Starrett City housing complex in Brooklyn, the largest publicly assisted affordable housing complex in the nation.

Earlier this year, Governor David A. Paterson signed legislation, sponsored by Senator John Sampson and Assembly members Inez Barron and Vito Lopez, allowing Starrett City's owners to refinance the complex. In return, Starrett City will remain in the successful Mitchell-Lama affordable housing program, and the owners will provide at least $40 million for capital improvements to existing structures, facilities and apartment interiors.

Governor Paterson said "Preserving affordability at Starrett City was a top priority for my administration. Refinancing Starrett will ensure affordable housing for thousands of tenants who live in the vibrant Starrett City community, and will allow the owners to make necessary renovations without causing rents to rise. I want to thank all of those who have been working for several years to make today's announcement possible."

Senator Chuck Schumer said, "The Starrett City tenants, who have been living for far too long under the stress of uncertainty regarding the future of their homes, will be receiving the perfect holiday gift this year, knowing their homes will remain affordable. This could not have been done without the owners, the tenants, federal, State, and local government officials all working together toward a common goal. This is a new chapter in the lives of the Starrett City residents and I will continue to work to protect affordable housing across New York."

Senate Majority Conference Leader John Sampson said, "I am pleased that through our combined efforts we have been able to make Starrett City housing remain affordable for the thousands of families who call this huge complex home. This is an important community in my district and I eagerly await the scheduled renovations that will help improve the quality of life of all residents. This refinancing plan means that low-income families and seniors on fixed incomes can stay in their homes, especially during these challenging economic times."

Assembly Housing Chairman Vito Lopez said, "I am proud to work with Assembly member Barron and Senator Sampson to ensure that thousands of units of affordable housing are saved. By working together, we have ensured that the tenants of Starrett City will not lose their homes or their community."

Division of Housing and Community Renewal Commissioner VanAmerongen said: "Today is the culmination of a two-year process to protect tenants, improve the quality of life at Starrett and also provide a framework that we can use to maintain affordable housing at other endangered complexes around the State."

Teresa Bainton, Multifamily Housing Director in HUD's New York Regional Office, said "This refinancing will maintain affordability at Starrett City, and allow for repairs and improvements to the property. It's a great victory for New York State, New York City, and, most of all, for the residents, who will be able to remain in their homes and community."

Two years ago, the proposed sale of Starrett was blocked by DHCR and the federal Department of Housing and Urban Development (HUD) amid concerns that the purchase price of $1.3 billion was too high to maintain affordability.

Since that time, Commissioner VanAmerongen has been working with the owners of Starrett, the city Department of Housing Preservation and Development (HPD), the state Housing Finance Agency (HFA) and the federal Department of Housing and Urban Development (HUD) to reach an agreement that would be beneficial to the owners as well as to the tenants and ensure that Starrett would remain affordable. These efforts resulted in the new law to allow the refinancing of the complex, and the preservation of Starrett City as affordable housing.

Under the new law, Starrett City Associates will dedicate at least $40 million to a capital reserve fund, which will provide important repairs and improvements, including:

Replacement of apartment unit refrigerators, dishwashers, kitchen cabinets, counters and bathroom vanities;

Replacement of damaged and older vinyl floors; and

Tower and garage structural repairs.

The new law also gives tenants input into the allocation of capital reserve funds and other issues. The owners also agreed to hold regularly scheduled meetings with tenants and local elected officials while the capital improvements are being made.

Starrett City was built in 1976 and comprises 46 buildings over more than 153 acres. Also known as Spring Creek Towers, the affordable housing complex includes parking garages, handball and basketball courts, grassy fields, playgrounds and a shopping center. The development is one of the largest and most successful in the Mitchell-Lama program, a state program that has provided affordable rental and cooperative housing to moderate- and middle-income families since 1955.