Related Apartment Preservation (RAP), a subsidiary of The Related Companies, LP, one of the nation's leading full-service real estate firms, today announced that it has purchased Ocean Park Apartments from the Ocean Park Company. Ocean Park is an existing affordable housing development originally constructed in 1972 under New York City's Mitchell Lama Program. Affordability was provided through rent regulation, real estate tax abatements and low interest rate loans.
The Program's life was limited to twenty years, however, which has recently caused concern for Mitchell Lama residents as some owners have withdrawn their properties from the Program, thus reducing New York City's affordable housing stock. RAP's purchase of Ocean Park is continued evidence of the commitment of The Related Companies to affordable housing in New York City. Related has been able to achieve this goal in this Far Rockaway location through use of the following financing methodologies: RAP has been approved for the use of $39 million of tax-exempt bonds provided by the New York State Housing Finance Agency.
The bonds were credit enhanced by Fannie Mae for 30 years; and were underwritten by Bank of America. The mortgage loan servicer is American Property Financing. In exchange for receiving the tax-exempt financing, RAP has agreed to extend the property's affordability for an additional 40 years. The Section 236 mortgage interest subsidy from the U.S. Department of Housing and Urban Development is being maintained along with the rent and income limitations of that federal program.
Related Capital Company, a subsidiary of Charter Mac (AMEX:CHC), one of the nation's premier financial services companies for the real estate industry, will invest almost $11 million in equity. The property will benefit from the federal Low Income Housing Tax Credit program as provided for by the U.S. Department of the Treasury and administered by the New York State Housing Finance Agency. This program will further provide for restricted incomes and rents and long term affordability. The new financing and equity infusion will enable RAP to invest extensively in property renovations including new roofs, new windows, a complete renovation of the outdoor concrete plaza, building facade repairs and interior and apartment renovations to improve the quality of life for the residents.
Property Description Ocean Park is a 602-unit multi-family rental housing development consisting of two 26-story towers and two single story commercial buildings located at 125 Beach 17th Street, 120 Beach 19th Street, and 1721-1731 Seagirt Boulevard in Far Rockaway, Queens. The Project was originally built in 1972 and consists of 300 one-bedroom units, 250 two-bedroom units and 50 three-bedroom units, and two additional two-bedroom units set aside for the superintendents. The project also contains on-site parking with 329 covered garage spaces and 95 outdoor parking spaces, a swimming pool, playground area, community room and laundry facilities in each building. The Project includes two one-story commercial buildings located on Seagirt Boulevard. The buildings contain 5 fully occupied retail units which include a drug store, bank, convenience store, sit-down restaurant and medical office.
Development Team RAP was chartered to acquire, rehabilitate and preserve affordable housing around the country. Since 1998, RAP and its principals have successfully preserved in excess of 7,500 units of affordable housing in five states. Related is a New York limited partnership founded by Stephen M. Ross. Operating through an affiliated group of companies referred to collectively as "Related" or "The Related Companies," Mr. Ross has been active in real estate acquisition, development, financial services and management since 1972. Today, Related is a fully integrated real estate firm with expertise in acquisition/development, financial services and property/asset management, overseeing a real estate portfolio valued in excess of $11 billion. Related, either directly or in partnerships with third parties, owns, operates or has under construction residential projects totaling approximately 137,000 apartments in 21 states.
Related's principal offices are in New York City, Chicago, Illinois, Irvine, California, and Miami, Florida. The other member of the development team is DB Development, Ltd. The principals of DB Development, Ltd. are B. Tuckey Devlin and David B. Workman. Related Management Company, L.P. ("RMC") will manage the Project. RMC presently manages approximately 120 apartment complexes in nine states containing over 23,800 housing units.