Essex Crossing Gets $95M Construction Loan from Goldman
Goldman Sachs provided Delancey Street Associates—the venture led by L+M Development Partners, Taconic Investment Partners and BFC Partners—with $95 million in financing for Essex Crossing’s Site 1, according to records filed with the city today.
Proceeds from the construction loan are being used to build 55 condominium units at the site, which is located at 236 Broome Street on the Lower East Side, a person familiar with the transaction confirmed. Eleven of the condo units will be priced below market rate.
The retail portion of the development will include the 17,000-square-foot bowling alley Splitsville Luxury Lanes.
Additionally, Delancey Street Associates signed a contract with the city making it liable for $31.9 million if the developers do not comply with their agreement to create the below-market-rate units at Site 1.
The partnership expected to secure construction financing for the site, which sits between Ludlow and Essex Streets, before the end of the year, Commercial Observer previously reported.
In December 2014, Goldman Sachs committed $200 million to Essex Crossing, according to the investment firm’s website. It was not immediately clear if this recent construction loan is a part of those funds.
The developers have been pulling from a number of major lenders for the nine-building megaproject. In July, Wells Fargo and Citibank provided the partnership with a total of $250 million in construction financing—$109 million for Site 5, and $144 million for Site 2, respectively. Site 5 will feature 66,000 square feet of retail space and 211 rental units, and Site 2 will feature 195 rental units and retail space that will house the relocated Essex Street Market.
In September 2013, the city awarded the joint venture the right to develop the nine sites, which were acquired for $180 million. Development costs for Essex Crossing are expected to total $1.1 billion. The full project is due for completion in 2024 and will contain 1,000 residential units, half of which will be marketed as affordable housing.
A representative for Goldman Sachs did not respond to inquiries by time of publication. A spokesman for Delancey Street Associates confirmed the recent financing, but declined to comment further.
—With additional reporting by Terence Cullen