Trio of Banks Purchased $175M in Bonds for Domino Sugar Site Development
Wells Fargo, J.P. Morgan and M&T Bank teamed up to purchase $175 million in taxable bonds issued by the New York State Housing Finance Agency for the construction of Two Trees Management’s 260 Kent Avenue—a soon-to-be mixed-use building on the site of the former Domino Sugar Factory in Brooklyn, property records show.
Wells Fargo acted as the lead in the transaction, purchasing $75 million in bonds, while M&T Bank and J.P. Morgan each picked up $50 million, sources confirmed. Two Trees’ application for bond financing was approved by the New York State Homes & Community Renewal (HCR) board on January 25, and the deal officially closed on March 9.
A spokeswoman for Wells Fargo confirmed the bank’s role in the transaction. HCR declined to comment on any specific details of the financing.
The development’s total cost sits at roughly $309 million, with Two Trees deploying $134 million in equity to round out the cost, according to the developer’s HCR application and as first reported by The Real Deal in January.
The planned, 22-story mixed-use residential and office development at the roughly $3 billion Domino Sugar Factory site, is situated between Grand and North First Streets.
In August 2017, The Real Deal reported that the HCR stopped funding “80/20 projects,” or those where 20 percent of the units are affordable, with tax-exempt bonds through the Housing Finance Agency, until at least the end of this year. Instead, tax-exempt bonds are to be used to fund projects that are 100 percent affordable.
Two Trees erected it’s first apartment building on the Domino site—at 325 Kent Avenue, which is a 16-story building that comprises 522 units—in April 2017. A month later, the developer announced it started leasing at the property. Two Trees CEO Jed Walentas, said at the time that the firm had received 87,000 applications for its 104 affordable units.
An official at M&T Bank was not immediately available for comment. A spokeswoman for J.P. Morgan did not immediately respond to request for comment.