BNYDC Refinances EB-5 Debt at Brooklyn Navy Yard with $58M Loan From AIG
By Mack Burke September 30, 2020 1:32 pm
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The Brooklyn Navy Yard Development Corporation (BNYDC) has nabbed $58 million in debt from life insurance company AIG to retire EB-5 financing that had been used to make improvements to the Brooklyn Navy Yard, according to city mortgage records and sources who spoke with Commercial Observer.
The 20-year, fixed-rate loan pays interest at a rate under 4 percent and was used to pay off existing EB-5 financing that had been employed over the last 7 years by BNYDC to upgrade the Brooklyn Navy Yard’s infrastructure and make other improvements, according to information from Singer & Bassuk Organization, which sourced and arranged the financing.
Subordinate ground leasehold positions collateralize the financing, providing “strong security of cash flow to the lender, and lowest-cost financing to the borrower,” as per information from Singer & Bassuk.
The subordinate ground leases under Boston Properties (BXP) and Rudin Management Company’s newly-built, 675,000-square-foot Dock72 office building as well as under two Steiner Studios-leased industrial buildings acted as collateral in this deal.
AIG declined to comment on the transaction.
“This financing is a key driver of our largest expansion since WWII, which will bring our job total to more than 20,000 in the coming years,” BNYDC president and CEO David Ehrenberg said in a statement.
BNYDC is the non-profit development and management arm representing the city of New York in matters related to the city-owned Brooklyn Navy Yard, which was once one of the country’s most active and well known shipbuilding yards located off Flushing Avenue in Brooklyn. The 300-acre site is now home to more than 450 businesses and generates over $2.5 billion per year for the city, according to information from BNYDC’s website.
New York-based advisory firm Singer & Bassuk president Scott Singer as well as Kathleen McSharry worked with BNYDC’s Ehrenberg, Paul Kelly, Melissa Goldschmid, Wimal Ariyawansa and Avi Sharoni in securing the debt. Goulston & Storrs’ Max Friedman served as outside counsel in the transaction.
“BNYDC has successfully leveraged EB-5 bridge financing to create 6,000 jobs in recent years, and we are delighted to have facilitated 20-year replacement financing which will further strengthen the Brooklyn Navy Yard as an engine of economic activity and job growth for the City going forward,” Singer said in a statement. A representative for Singer & Bassuk and officials at BNYDC declined to comment on the lender’s identity.
Businesses located in the Brooklyn Navy Yard include WeWork (WE), which has leased about a third of the office space at Dock72, and startup Easy Aerial, which manufactures autonomous drones. These two are among a variety of other firms from various sectors and disciplines that call the site home, such as in education, media, art and photography, warehousing, transportation, logistics, manufacturing and printing.
