NEW YORK CITY — Brooksville Company and Rockpoint Group have closed on their purchase of Spring Creek Towers for $905 million from Starrett City Associates. State and federal regulators approved the sale of the nation’s largest subsidized affordable housing complex, which is still often referred to by its former name Starrett City.
Brooksville and Rockpoint will extend the current federal Department of Housing and Urban Development Section 8 protections 20 years through 2049 and Mitchell Lama protections by 15 years through 2054. They will also invests over $140 million in capital improvements.
“We have long believed in the need to protect and preserve affordable housing in New York City and are committed to the long-term health of this community,” says Andrew MacArthur, president of Brooksville Company. “We have worked closely over the last several months with community leaders, elected officials and regulators to ensure that this transaction fulfills and continues the original vision of Spring Creek Towers.”
“We plan to invest in the property’s infrastructure, which residents have indicated should be a top priority, and look forward to working together with Brooksville to make additional upgrades and enhancements as we assume stewardship of this important residential community,” says Keith Gelb, Rockpoint co-founder.
Spring Creek Towers houses approximately 15,000 residents living in 5,881 apartments in 46 buildings. Spanning 153 acres, the complex stretches along Pennsylvania Avenue just north of the Belt Parkway in Brooklyn, New York.
Every apartment is subsidized to maintain affordability. Approximately 60% of the units participate in HUD’s Section 8 rental assistance program, and the remaining 40% participate in HUD’s Section 236 interest rate reduction program and the New York State Division of Housing and Community Renewal’s Mitchell Lama program. The development has a standalone power plant, 90 public safety workers, a 100,000 square-foot fitness and community facility, 125,000 square feet of retail space and over 100 acres of community parks and green space.
As previously reported in GlobeSt.com, plaintiffs filed a lawsuit, trying to stop Starrett City Associates general manager Carol Deane from selling the property to Brooksville and Rockpoint. The plaintiffs included Carol’s four step-children and minority interest shareholders.
Carol had inherited Starrett City from her husband Disque D. Deane. The New York Times had reported on the drama involved with the property: Carol met Disque through his daughter Marjorie, who was her college roommate. His divorcing his wife for Carol had estranged his four children.
The lawsuit alleged the process of the marketing the property was flawed and the $905 million sale price was too low. However, the judge ruled against the dissident shareholders, allowing the sale to proceed.
“The commitment by Brooksville and Rockpoint to invest in the infrastructure of the site, insuring the delivery of essential services for many years to come, and in maintaining the quality of life residents have enjoyed and expect, and, importantly, to extend the affordability, for the 15,000 residents who call Spring Creek Towers home was a major factor in moving ahead with the sale,” says Deane.
Douglas Harmon, chairman of capital markets for Cushman & Wakefield, the exclusive advisor on this transaction, says, “The prime location of this asset, coupled with the fact that there will be significant investments and improvements made, was clearly a win-win for both parties,”
Since announcing its intent to purchase the Starrett City in September of 2017, Brooksville and Rockpoint have met with the tenants association and local elected officials to learn more about the property and determine capital investment priorities. One of the most immediate concerns was the condition of the power plant. In response, Brooksville and Rockpoint have committed to substantial upgrades to the power plant, including the addition of back-up power and an overhaul of the community’s underground piping system.
Reprinted with permission from the 5/9/18 edition of the GlobeSt.com© 2018 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or firstname.lastname@example.org.