Arverne By the Sea YMCA

Building Communities Over Time through Smart Development Strategies

Financing for Waterfront Development Retail Hub and Community Center

ThinkForward served as Financial Advisor

CLIENT/PROJECT

Planned Community
Retail Transit Hub
YMCA Community Center
Far Rockaway, Queens
New Construction

FINANCING

$11.5M Tax-exempt Bonds
$4M Bridge Loan
Closed Month 2014
Total Project: $45M

FINANCING BREAKDOWN

Total Project: $23M (Stop&Shop) & $22M (YMCA)
Capital Grants from HPD

SUPPLEMENTAL DATA

117-acre Planned Community
55,000 SF (Stop&Shop)
36,000 SF (YMCA)
270,000 SF retail/commercial

COLLABORATORS

New York City Economic Development Corp.
New York City Industrial Development Agency
TD Bank (Funder)
Windel Marks (Bank Counsel)
HPD Ackerman (Borrower Counsel)

Meeting Community Needs

Arverne by the Sea is a master-planned, mixed-use residential development along the Southshore waterfront in Arverne. The area is a designated New York City Recovery Zone. For many years, this community has been challenged by a dearth of commercial space and retail options. As evidenced by a NYC 2008 DzGoing to Marketdzstudy, residents have particularly needed supermarkets and access to affordable, fresh groceries.

In response, two major Long Island-based development groups entered into a joint venture: The Benjamin Companies, a full-service real estate development and management company, andThe Beechwood Organization, the tri-state area’s largest homebuilders. The development team proposed to the NYC Department of Housing Preservation and Development (HPD) a winning design strategy that combined storm-protection measures with transit-oriented planning.

For separate phases of development, ThinkForward worked closely with the developers to secure financing for retail components encompassing a Stop & Shop Supermarket and a YMCA community center providing a range of neighborhood services. We ultimately arranged $11.5M in tax-exempt bonds through the very first Recovery Zone Facility Bond issue in NY State.

Development & Job Generation

In February 2009, the Federal government authorized $122M in allocations for tax-exempt Recovery Zone financing to New York City under the American Recovery and Reinvestment Act (ARRA). The subsidies were part of a comprehensive effort to jumpstart stalled retail and commercial development projects, such as Arverne by the Sea.

The Arverne by the Sea project epitomizes the aim of the Recover NYC Program and other efforts to redevelop the Far Rockaway peninsula, in that it is a job-generator, creating 200 construction jobs and another 100 permanent jobs.

Stimulating private lending provided critical support for local projects in Arverne and, more importantly, created hundreds of new jobs for unemployed workers. The project epitomizes the aimof the ARRA, in that it is a job-generator that addressed both shortand long-term economic development goals for the area.

Furthermore, the Stop & Shop and the YMCA are representative of progressive, community-building initiatives. The supermarketfeatures an eco-conscious design, including an Energy Star-rated, reflective white roof and daylight harvesting from skylights and windows. And, the new YMCA facility serves as a center for community-based activities, including need-based programs, such as after-school and college readiness programs, youth employment and job training, childcare, and adult learning.

Financing Community Assets in a Redevelopment Zone

ThinkForward served as financial advisor to the joint developers: the Benjamin-Beechwood Companies. The fact that the award-winning mixed-use Arverne community is located in a redevelopment zone made accessing the capital markets for the multi-phase effort exceptionally difficult.

As a result of the tax-exempt financing arranged by the ThinkForward team, the Stop & Shop Supermarket became the first of New York City’s Recovery Zone projects to open.

In addition to helping to procure the ARRA tax-exempt bonds, ThinkForward arranged $13M in capital grants from the city’s HPD, with the balance funded through a bridge loan from a foundation. We also arranged for a high-rated bank to provide a letter of credit to secure tax-exempt variable-rate demand bonds. This financing solution netted approximately $11.5M after funding capitalized interest, a six-month Debt Service Reserve Fund, and issuance expenses.

Sunil was able to see the big picture in our efforts to develop community projects in Arverne. At heart, he’s more a business leader than a banker, although he certainly knows how banks, lenders, and investors think. His knowledge and experience were invaluable to us, delivering customized solutions at all stages of the development process. This approach benefitted our organization as a whole—and not just for the individual project.

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