SCHUMER ANNOUNCES PENN SOUTH HAS OFFICIALLY CLOSED ON FEDERAL HUD LOAN; WILL HELP PRESERVE AFFORDABLE HOUSING FOR MIDDLE-CLASS FAMILIES IN NYC; EARLIER THIS YEAR, SENATOR SUCCESSFULLY PUSHED OMB TO SIGN OFF ON THE CHELSEA CO-OP’S NEW REFINANCING AGREEMENT
In January, Schumer Successfully Pushed for Quick Review of New Refinancing Agreement; Without Approval, Co-op Could Have Been Enveloped With High Interest Rates That Would Take Financial Toll On Thousands of Families And Seniors
Schumer Calls Penn South “A Vital Oasis of Affordability in the Heart of Manhattan” And Says New Agreement Allows Penn South to Reduce Current Debt Payments & Lock In Current Interest Rates
Schumer: Federal Loan to Help Keep Penn South Affordable Is Now Official
U.S. Senator Charles E. Schumer today announced that Penn South has officially closed on a loan from the U.S. Department of Housing and Urban Development. Earlier this year, Schumer successfully pushed the Office of Management and Budget (OMB) to approve refinancing agreement for Chelsea’s Penn South cop-op, which helps ensure the development remains affordable for an extended period. Prior to his push, Schumer explained that HUD, the lender, the City of New York and the Penn South co-op had negotiated an agreement to keep the property affordable and HUD had sent its terms of the agreement to OMB for approval. Schumer successfully pushed OMB to quickly review and approve the negotiations.
“Now that HUD has signed, sealed and delivered the HUD loan we pushed for – and needed to keep Penn South affordable for thousands of New Yorkers for years to come – we can all breathe a sigh of relief. Penn South is one of the last remaining middle-class havens in New York City and, with this news, we know this oasis of affordability will remain the wonderful place to live as it has been for decades,” said Senator Schumer. “Places like Penn South – that provide a safe and affordable place to live for middle-class New Yorkers— are increasingly rare and precious. So when the community leaders and building management called and asked for help to get this deal done with the feds I made it one of my very top priorities.”
“Penn South has a rich history, and is a model affordable housing community. With this HUD loan, we have the means to continue our original mission of providing quality homes to moderate-income New Yorkers for decades to come,” said Brendan Keany, General Manager.
“The HUD loan will stabilize the finances of the co-op and ensure that Penn South is both well-maintained and affordable. It’s a win-win for our shareholders, and for New York City as a whole. Penn South is a wonderful place to live and I am proud that the opportunity to be a part of this community will be available to another generation of middle-class New Yorkers,” said Morris Benjamin, Board President.
“Affordable housing like Penn South is what makes New York’s neighborhoods the vibrant, inclusive, and dynamic places they are” said Mirza Orriols, HUD Deputy Regional Administrator for New York and New Jersey. “Preserving this kind of housing and the opportunity it creates is at the core of HUD’s mission, and today we celebrate a victory that will keep Penn South affordable for decades to come.”
As part of the refinancing agreement, the current affordability provisions would remain in place for the full 35- year term of the HUD loan, and Penn South would be able to reduce its current debt payments by over $3 million per year, and lock in current interest rates. Over the next ten years, the cumulative savings of $30 million will finance vital infrastructure improvements to keep the development well-maintained. The savings from this loan, in combination with the annual property tax abatement from the City, will enable Penn South to continue its mission to provide quality affordable housing to another generation of New Yorkers. The 55 year old cooperative complex in Chelsea is one of the last remaining middle-class affordable oases left in New York City.
Penn South is a cooperative (co-op) development located between Eight and Ninth avenues, and West 23rd and West 29th streets, in the Chelsea neighborhood of New York City. The ten building development was built more than fifty years ago, in 1962, and includes 2,820 units of affordable housing.
A copy of Schumer’s original letter to OMB is below:
Shaun Donovan, Director
Office of Information and Regulatory Affairs
Office of Management and Budget
725 7th Street, NW
Washington, D.C. 20503
Dear Director Donovan:
The Penn South co-op was built in 1962 in the Chelsea neighborhood of New York City and for over five decades has served as a residential haven for low- and moderate- income tenants and families. Not only have the buildings that make up Penn South offered affordable housing to thousands of New Yorkers, but the entire development continues to provide a safe and beautiful community to all of the tenants and the broader neighborhood. These are the types of housing developments that are critical to serving the affordable housing needs of dense urban communities, like those in New York City, and will continue to require our commitment and attention. It is in this vein that I write to you to ask for your attention and strong consideration of the Penn South co-op’s efforts to secure refinancing which would ensure that the development remains affordable for an additional 22 years.
The opportunity to guarantee another two decades of affordable housing in this neighborhood is one that we cannot let pass without serious and diligent consideration. We simply cannot run the risk of failing to guarantee that the 2,820 units of affordable housing in this development will continue into the future. As you are aware, the high cost of housing and low vacancy rate in New York City has burdened many families. If these units were no longer kept affordable and were to dramatically increase, families would face significant financial hardship, and the stitches that bind that community would begin to unravel.
I am grateful that HUD, the lender, the Co-Op, and the City of New York have all worked cooperatively to negotiate an agreement that would keep this property affordable. However, a sense of urgency is necessary to work out and approve the refinancing of this loan. As you know, as part of the refinancing agreement the current affordability provisions would remain in place for the full 35-year term of the HUD loan. More immediately, Penn South would be able to reduce its current debt payments and lock in current interest rates, which would eliminate the risk of rate increases over time.
In just the past few decades, New York City has lost over 250,000 affordable apartments as the demand for affordable housing only continues to grow. The Penn South community has shown how essential this development is to the fabric of New York City. The property has been well managed and well maintained for years, but the refinancing agreement should also help to ensure that current and future repairs will be able to be made going forward – allowing Penn South to maintain its character and prominence in the neighborhood well into the future.
Given all of this, I urge you and your team to work with the other parties to carefully and diligently consider the terms of this agreement and make the necessary determinations as quickly as possible. Thank you for your time and attention to this matter and your continued efforts to promote affordable housing for New Yorkers.
Charles E. Schumer
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