Bank of America Leads $412M Financing for Phase 2 of Alafia in Brooklyn

A major mixed-use development in Brooklyn just got one step closer toward completion. 

RiseBoro Community Partnership, a New York nonprofit, has secured $412.4 million to finance construction of the second phase of Alafia, a mixed-use development in East New York, Brooklyn, that will deliver 634 units of affordable housing and 22,000 square feet of retail and community space, Commercial Observer has learned. 

L+M Development Partners and Apex Building Group are developing the project alongside RiseBoro. 

The $412.4 million loan comes through a mix of private and public financing, with Bank of America (BAC) contributing a senior construction loan, Merchants Capital Corporation providing a permanent loan, Merchants Capital Investment providing tax-credit equity, and the New York State Housing Finance Agency (HFA) financing additional subsidies. 

HFA subsidies come through the agency’s New Construction Program — a statewide capital program financing new construction and adaptive reuse for affordable housing  — and its Community Investment Fund, a capital bond that supports affordable housing development. 

Kieran Harrington, CEO of RiseBoro, said in a statement that this second-phase financing will help “bring this project over the finish line.”

“With today’s Phase 2 closing, RiseBoro has taken another step towards achieving our goal of giving New Yorkers not just an affordable place to live, but a home,” Harrington said. 

Sitting on 28 acres of decommissioned public land at 888 Fountain Avenue in the Spring Creek section of East New York, Brookln — a neighborhood about 14 miles from Midtown Manhattan — Alafia has been in development since 2018, when Empire State Development and New York State Homes and Community Renewal granted RiseBoro, L+M, and Apex license to develop a sprawling, multiphase affordable housing project that will eventually span 2.2 million square feet and deliver 2,400 housing units to residents. The project came to pass under former Gov. Andrew Cuomo’s Vital New York initiative. 

Phase 1 has already begun construction and is expected to deliver 576 affordable housing units across three buildings by the June of 2025. 

Wells Fargo, together with HFA and the state’s Community Renewal Housing Finance Agency, financed this phase through a $270 million public-private partnership.

The second phase of construction will begin next month and deliver a pair of 14-story buildings featuring affordable and supportive housing units, retail space, and a community day care facility. Construction is scheduled to be complete by the fall of 2027. 

Each of the new residential buildings in the second phase will include a fitness center, children’s playroom, community rooms, and outdoor courtyards together with affordable housing and supportive housing. 

The final phase of the Alafia project will include the construction of One Brooklyn Health, a 15,000-square-foot health care space for the community and residents. 

Bank and America and Merchants Capital Corporation declined to comment. 

Brian Pascus can be reached at bpascus@commericalobserver.com