CONEY ISLAND, NY-CharterMac subsidiary Related Capital Co. and the Arker Cos. won the Request for Proposal to redevelop Sea Park, a three-building 816-unit Mitchell-Lama housing development here. This marks the first time this pair has teamed on a project.

The $77-million redevelopment is just a few blocks from the famed Coney Island Boardwalk. Last year, the city formed the Coney Island Development Corp. to create a plan to diversify the area and transform it into a year-round locale. Last month, the city sold a 25,900-sf lot that will be combined with two adjacent ones to become a Staples. The redevelopment also builds upon other recent economic initiatives such as the construction of the Keyspan Park minor league baseball stadium and the renovation of the boardwalk and Stillwell Avenue subway terminal.

Woodmere-based Arker and Related Capital will act as co-developers on the revitalization with Related and its affiliate, PW Funding Inc., providing the debt and equity financing. Arker, which has a concentration of affordable-housing developments in Harlem and East New York, will also serve as general contractor. Sea Park, originally constructed between 1973 and 1974, was part of the Mitchell-Lama program created by the state in the mid-50s as a means of providing affordable rental and cooperative housing to moderate- and middle-income families.

“Coney Island is experiencing a dramatic renaissance but affordable housing has not kept pace,” says Patrick Martin, managing director of Related Capital. “This redevelopment will play a critical role in revitalizing the area.” Arker principal Allan Arker adds, “Coney Island is densely populated, and the strong demand for housing coupled with a limited supply has led to few vacancies and high costs.”

The revitalization will consist of three phases encompassing almost eight city acres. Rents will remain as much as $1,500 below comparable market-rate units. Amenities will include nearly 15,000 sf of private day care space, over 30,000 sf of outdoor recreation areas, community center space, private parking and more than 23,000 sf of neighborhood retail. Redevelopment is expected to be complete by the end of 2005. Finished units will consist of studio to five-bedroom residences situated in three mid- to high-rise structures, with apartments ranging in size from 485 sf to 1,500 sf.

Arker and Related Capital coordinated six government agencies who collectively worked to spearhead the redevelopment, including HUD, the Empire State Development Corp., the New York State Housing Finance Agency, the New York State Division of Housing and Community Renewal, the New York City Department of Housing Preservation and Development and the New York State Energy Research and Development Authority.

Related Capital and PW Funding financed the transaction though a multi-phase structure that enabled the development team to preserve and restructure much of the property’s existing financial assistance, while generating new capital. Related Capital provided nearly $25 million in equity in exchange for tax credits generated by the property and over $45 million of Freddie Mac debt financing and credit enhancement was provided through PW Funding. The balance of the financing included $979,000 from the NYSDHR, through its Weatherization Assistance Program in addition to an allocation of housing tax credits, $1.6 million from the ESDC, and $846,000 from the NYSERDA, among other financing. The NYSHFA provided the project with an allocation of tax-exempt bonds and low-income housing tax credits. HUD’s restructuring of its existing financial assistance provided the basis for the financing plan.

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