Developers Finalize Acquisition and Financing for JFK Hotel-to-Residential Conversion
By Rebecca Baird-Remba December 18, 2023 2:37 pm
reprints
Slate Property Group and RiseBoro Community Partnership have acquired the shuttered JFK Hilton hotel in Jamaica, Queens, for $64 million, with plans to start converting the site into supportive housing next month, the developers and city officials announced Monday.
The 350-room hotel at 144-02 135th Avenue will be turned into 318 apartments for low-income and formerly homeless New Yorkers and will include on-site staffing and services for residents who are transitioning from shelters to long-term housing, according to developers. Slate will complete construction in 21 months by making “only selective changes to internal walls,” according to its press release.
The project will be the first conversion of a hotel to affordable housing in the state financed through the Housing Our Neighbors with Dignity Act (HONDA), a 2021 piece of legislation that aimed to incentivize conversions of distressed hotels.
“As we face down a national housing and homelessness crisis, this project is a model that points the way to rapidly bring new apartments online more than a year faster than ground-up construction,” David Schwartz, a principal at Slate, said in a statement.
Dubbed the Baisley Pond Park Residences, the project will have rents ranging from $784 for a studio to $1,493 for a two-bedroom apartment. Construction will involve replacing the mechanical systems with all-electric heating and cooling, rooftop solar panels and energy-efficient appliances. Aufgang Architects is designing the development, which will have multiple community rooms, a computer lounge, a fitness room, a laundry room and an indoor/outdoor garden space.
“Creativity is necessary to fill New York City’s need for affordable housing and, with Baisley Pond Park Residences, all parties involved have met that challenge,” said Scott Short, the CEO of RiseBoro. “We’re thrilled to be a part of the first successful hotel conversion in New York and look forward to taking another step in bringing affordability and access to the people of this city.”
The two developers have nailed down a slew of public financing for the $167 million project, including $48 million from the HONDA program, a $50 million senior loan from New York City Housing Development Corporation (HDC), along with subordinate debt from HDC and the New York City Department of Housing Preservation and Development.
The project will also be funded by tax-exempt bonds provided by HDC. Lastly, MSquared, the development firm helmed by former de Blasio housing advisor Alicia Glen, provided a $4.4 million pre-development loan the developers repaid at closing.
To qualify for HONDA financing, developers must set aside at least half of their units as supportive housing, and the entire project must be affordable to people at or below 80 percent of the area median income, or $101,860 for a family of three.
Under the program, the state provides a long-term, low-interest loan of at least 30 years with up to $150,000 in financing per unit. In exchange, developers are subject to a 99-year regulatory agreement for the affordable units and must pay building service workers prevailing wages.
The state legislature passed HONDA in 2021, but the program received zero applications in its first year. The state loosened HONDA requirements last year to allow hotels to keep their commercial certificates of occupancy when switching to residential use and let conversions happen in manufacturing zones.
Rebecca Baird-Remba can be reached at rbairdremba@commercialobserver.com.
