Oritani Finance Company has provided a $27.8 loan on the 400-rental-unit complex Island House, on Roosevelt Island, to finance its conversion into co-ops, Joe Laquidara, a vice president with Oritani confirmed to The Mortgage Observer.
An unpaid part of a previous loan, for $17.4 million, was assigned by New York State Urban Development Corporation to Oritani Finance Company, and the owners of Island House — North Town Phase II — obtained a $10.4 gap mortgage from Oritani, according to public records. “It is a loan of $27.8 million, which includes the payoff of the state loan for $17.4 million, and the balance for reserve and co-op conversion,” Mr. Laquidara said.
Currently, the tenants of Island House, at 551-555-575 Main Street, pay regulated rents under the state-supervised Mitchell-Lama program. But under a new plan, the owners will convert it into co-ops, allowing the current tenants to buy the apartments where they live at affordable prices, as Crain’s New York Business first reported. The plan “provides the opportunity for tenants to buy their apartments,” said Mr. Laquidara, adding that those who cannot afford to buy will still enjoy regulated rents. “It’s a win-win for everyone,” he said.
After being under the radars for a long time, Roosevelt Island is now attracting development, the most important being Cornell University’s project for an applied sciences campus. According to Mr. Laquidara, these changes were part of the consideration for the conversion into co-ops and for providing the loan.
Representatives with North Town Phase II were not immediately available for comment.