Presented by:

Marian Zucker, President of the Office of Finance & Development, NYS Homes & Community Renewal

James Lupoli, Assistant Director/ Real Estate Officer, NYS Office of Mental Health

Ralph Fasano, Executive Director, Concern for Independent Living

Chris Betts, Principal, Betts Housing Partners

Moderated by: Joseph Lynch, Managing Partner, NYC Office, Nixon Peabody

LIHTC and OMH: Navigating a Housing Deal

Concern

•• 300+ Employees300+ Employees•• 240+ sites240+ sites•• Current Capacity Current Capacity –– over 850 residentsover 850 residents•• Approx. 450 Units in DevelopmentApprox. 450 Units in Development•• Over $150 million in capital raised inOver $150 million in capital raised in

past 5 yearspast 5 years•• OMH, HUD and OASAS contractsOMH, HUD and OASAS contracts•• Annual Budget Annual Budget –– Approx. $24 millionApprox. $24 million

Mission

To provide housing and services that To provide housing and services that enrich lives and strengthens enrich lives and strengthens communities.communities.

Key Values• Privacy• Safety• Dignity• Choice• Wellness/Recovery Oriented Attitude• Work is Important• A Healing Environment• A Home• An Asset to the Community

Supervised Community Supervised Community ResidencesResidences

•• Typically 8Typically 8--1212residents per residents per househouse

•• Staff supervision Staff supervision 24/724/7

•• TransitionalTransitionalhousinghousing

•• Funding through Funding through OMH & MedicaidOMH & Medicaid Shoreham West CR

OMH OVERVIEWOMH OVERVIEW

James Lupoli,

Assistant Director/ Real Estate Officer, NYS Office of Mental Health

SPSP--SRO and Mixed Use HousingSRO and Mixed Use Housing

• SP-SRO is considered long term or extended stay housing with individualized support services provided to residents

• Apartments are usually studio or one bedroom

• Providers must follow OMH Supported Housing Implementation Guidelines

• Must be integrated among other affordable housing units

SP SRO HousingSP SRO Housing

• SP SRO is unlicensed housing , however Housing Providers must provide person- centered, flexible services, and help individuals maintain linkages to other services in the community and follow OMH SH Guidelines

• SP SRO Application must be completed prior to operation of SP SRO units

Operating Funds for OMH HousingOperating Funds for OMH Housing

• OMH funds the operating costs of most OMH housing– Property operating, including rent stipends

and mortgage payments– Program/Services

• Sources of Funding– SSI– State aid

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Annual Operating FundingAnnual Operating Funding

NYC, Long Island and Lower Hudson River Region

On Site Services $10,118 Property Operating + 6,399 (Exluding debt service)Total Gross = $16,51730% SSI Living Alone Rate - 2,618 (90% collection

rate)

Total Net from OMH = $13,899 per bed/unit

Tax Credit Compliance Fee $15,000 per year

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Mixed Use HousingMixed Use Housing

• Affordable housing where OMH-funded units are targeted toward individuals with serious mental illness and are integrated among other affordable housing units

• The other units may be targeted to low- income individuals and families.

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Benefits of Mixed Use HousingBenefits of Mixed Use Housing

• Reduces stigma• Lessens community resistance • Provide opportunities for recovery and

rehabilitation• Housing is in normal/mixed neighborhoods • Funding for housing development is from

several different sources, reduces cost

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Housing Development/FinanceHousing Development/Finance• OMH works with private non-profit

agencies to develop housing in NYS for persons with serious mental illness.

• OMH provides capital and operating funding.

• OMH promotes integrated/mixed use housing, serving people with and without disabilities at the same location.

• Sponsors are encouraged to apply for other state and federal funding in addition to OMH funding.

Potential Other FundingPotential Other Funding• Tax Credit Syndicators – secures private

investors• DASNY – issues tax-exempt bonds• Commercial Lenders• OTDA – HHAP capital funding program• HCR – HTF capital and allocates 9% tax credits• HFA – issues tax-exempt bonds and allocates

4% tax credits• Federal Home Loan Bank• HUD

OMH & Low Income Housing Tax CreditsOMH & Low Income Housing Tax Credits

• NYS OMH has financing for its Supportive Housing programs that utilizes the 4% As-of- Right and 9% Competitive Low-Income Housing Tax Credits (LIHTC).

Differences Between 9% and 4% Tax Credits with Differences Between 9% and 4% Tax Credits with OMH CapitalOMH Capital

• 4% Low Income Tax Credits:- “As of Right”- Tax Exempt Private Activity Bonds with DASNY or HFA- OMH makes debt service on behalf of Sponsor with a signed Assurance Agreement from Sponsor

• 9% Low Income Tax Credits:- Competitive- OMH includes the required debt service in annual operating contract with a signed Assurance Agreement

OMH PROJECT APPROVALOMH PROJECT APPROVAL

• Provider must be have bed authority from an RFP

• Locate Site• OMH assists with studies• Develop Budgets for both Capital and

Operating.• If acceptable, OMH will seek DOB

approval for Project

PROJECT VIABILITYPROJECT VIABILITY

• Location• Mixed Use and meets spirit of Olmstead• Amount of Funding from All Sources is

Reasonable• Cost per OMH Unit is a prorated

amount as compared to the total project cost per unit.

• Cost per Unit is reasonable and able to be approved by DOB

DASNY/OMH 4% LEGAL STRUCTUREDASNY/OMH 4% LEGAL STRUCTURE

OMH + Tax Credits + Other OMH + Tax Credits + Other Funding Partners = Funding Partners =

�Mixed-Use�Integrated�Safe�Affordable�HOUSING

6/9/20146/9/2014

DEVELOPMENT HURDLESDEVELOPMENT HURDLES

• DEVELOPMENTTEAM

• SITE CONTROL• SECURE FUNDING• LOCAL COMMUNITY

AND GOVERNMENT SUPPORT

• MEET CLOSING DEADLINES

• BUILD AND OCCUPY

ASSEMBLING A DEVELOPMENT ASSEMBLING A DEVELOPMENT TEAMTEAM

•AGENCY STAFF

•ARCHITECT

•ATTORNEY

•CONSULTANT

•CONTRACTOR

•BROKERS

•APPRAISER

•ENVIRONMENTAL EXPERT

GETTING SITES GETTING SITES •FIND A (SEVERAL) COMPETENT, HONEST REAL ESTATE BROKER(S)

•SPREAD THE WORD - FAMILY, FRIENDS, STAFF, BOARD MEMBERS, COLLEAGUES, LAWYERS, ACCOUNTANTS

•MEET WITH PROPERTY OWNERS, LOOK FOR ONES WITH COMPLEMENTARY NEEDS

•BE PREPARED TO PAY FOR OPTION AGREEMENTS AND MORE THAN APPRAISED VALUE (with your own $)

SITES TO CONSIDER SITES TO CONSIDER AVOIDINGAVOIDING

SITES WHICH CANNOT BE RENOVATED OR BUILT WITH THE AMOUNT OF FUNDING AVAILABLE

SITES THAT REQUIRE ZONING CHANGES OR DO NOT PERMIT INTENDED USE

SITES TO CONSIDER SITES TO CONSIDER AVOIDINGAVOIDING

SITES WITH ENVIRONMENTAL ISSUES

SITES TO CONSIDER SITES TO CONSIDER AVOIDINGAVOIDING

SITES LIKELY TO RAISE INTENSE COMMUNITY OPPOSITION

SITES TO CONSIDER SITES TO CONSIDER AVOIDINGAVOIDING

SITES WITH UNUSUAL FEATURES

Nike Missile Silo – Liberty Village

Former Family Lodge Adult Home

Pollack Gardens

Former South Country Adult Home

Concern East Patchogue

East New York Avenue Site

Amityville Site

CONCERN AMITYVILLE

SITE PICTURE OF NORWOOD BEFORE

BERGEN FRONT AND BACK RENDERING

PICTURE OF RONKONKOMA SITE WITH UGLY BUILDING

VACANT LAND MIDDLE VACANT LAND MIDDLE ISLANDISLAND

OMH and Tax CreditsOMH and Tax Credits

• Integrated Housing Model• Mixed Populations• Additional Financing Sources• More coordination, planning, challenges, timing• OMH more involved. Very supportive and

protective.• Nonprofit service provider integral part of

project: ownership role, favorable nonprofit buyout opportunity after LIHTC compliance

Financing: OMH and DASNYFinancing: OMH and DASNY• 4% LIHTC – as of right• DASNY provides tax exempt bond• Initial closing only with OMH• Close on LIHTC, DASNY bonds and other

sources during construction• Little or no interest cost• Limited Developer’s fee• Lower issuance costs• Bid Construction• Use OMH form of Architect and GC Agreements• Coordinate bond closing

Financing: OMH and HCR/HFAFinancing: OMH and HCR/HFA• 4% LIHTC – as of right• HFA provides tax exempt bond• Close with all sources prior to construction start• More Potential Developer Fee• Higher interest and bond issuance costs• Bring GC in early – no bidding required• Increased flexibility on bond closing• Possible Subsidy Source

Financing: OMH and HCR 9%Financing: OMH and HCR 9%• 9% LIHTC – very competitive• Once a year HCR funding rounds• Conventional construction and permanent loans• OMH provides debt service support for

permanent loan.• Close with all sources prior to construction start• More Potential Developer Fee• Higher interest than DASNY• Bring GC in early – no bidding required• Possible Subsidy Source through NYS Housing

Trust Fund

Middle Island, NYMiddle Island, NY Developed by Concern For Independent Living, Inc.Developed by Concern For Independent Living, Inc.

123 Apartments123 ApartmentsNew ConstructionNew Construction

Construction Start: Fall 2014Construction Start: Fall 2014Financing Partners:Financing Partners:

NYS Homes and Community RenewalNYS Homes and Community RenewalNYS Office of Mental HealthNYS Office of Mental Health

NYS OTDA/HHAPNYS OTDA/HHAPSuffolk CountySuffolk County

• Picture of middle island land

Concern Middle IslandConcern Middle Island

Construction Sources % Funding AmountConstruction Period Bond/Letter of Credit 50.3% 23,750,000LIHTC Equity 4.0% 1,867,300OMH PDG 0.4% 200,000OMH Construction Financing 31.5% 14,877,400HCR/HFA Subsidy 1.1% 538,233Suffolk County 0% 0HHAP 3.2% 1,500,000Deferred Developer Fee 9.4% 4,439,414Total Sources of Funds: 100% $47,172,347

Construction Sources - DRAFT

Construction Sources % Funding AmountPermanent Mortgage 33.1% 15,607,400LIHTC Equity 39.6% 18,673,000OMH PDG 0.9% 420,000HFA Subsidy 6.3% 2,950,000Suffolk County 1.6% 750,000NYS HHAP 15.9% 7,500,000Developer Fee for Projected Costs 2.7% 1,271,948Total Sources of Funds 100% 47,172,348

Permanent Sources - DRAFT

Concern Bergen, 1552 Bergen Street, Brooklyn, NYConcern Bergen, 1552 Bergen Street, Brooklyn, NY Developed by Concern For Independent Living, Inc.Developed by Concern For Independent Living, Inc.

90 Apartments90 Apartments Construction Start: February 2014Construction Start: February 2014

Financing Partners:Financing Partners: NYS Homes & Community RenewalNYS Homes & Community Renewal

NYS Office of Mental Health NYS Office of Mental Health The Community Preservation Corporation The Community Preservation Corporation

National Equity FundNational Equity Fund

Construction Sources % Funding AmountConstruction Loan 9,177,151LIHTC 2,872,818NYS OMH 13,750,000Deferred Developer’s Fee 2,602,982Deferred Capital Reserve 376,883NYS OMH PDG 466,510Sponsor Funds 300,000Total Sources of Funds: 100% 29,546,344

Construction Sources - DRAFT

Construction Sources % Funding AmountCommunity Preservation Corporation/OMH 13,750,000LIHTC 14,364,087NYS OMH PDG 466,510Sponsor Contribution 966,747Total Sources of Funds: 100% 29,546,344

Permanent Sources - DRAFT

100 Apartments100 Apartments Construction Start: Summer 2014Construction Start: Summer 2014

Financing Partners:Financing Partners: NYS Office of Mental HealthNYS Office of Mental Health

Dormitory AuthorityDormitory Authority NYS Homes and Community RenewalNYS Homes and Community Renewal

RedStoneRedStone CapitalCapital

Ebenezer SquareEbenezer SquareDeveloped by DePaul of RochesterDeveloped by DePaul of Rochester

Construction Sources % Funding AmountOMH/DASNY Financing 17,612,100Tax Credit Equity 3,275,535OMH PDG 436,150Deferred Developer Fees 3,198,568Deferred Capitalized Reserves 420,000Total Sources of Funds: 100% 24,942,353

Construction Sources - DRAFT

Construction Sources % Funding AmountOMH/DASNY Financing 17,612,100Tax Credit Equity 5,785,896NYS OMH PDG 436,150Deferred Developer Fees 1,108,207Total Sources of Funds: 100% 24,942,353

Permanent Sources - DRAFT

90 Apartments90 Apartments Construction Completion: Fall 2014Construction Completion: Fall 2014

Financing Partners:Financing Partners: NYS Homes & Community Renewal NYS Homes & Community Renewal

NYS Office of Mental Health NYS Office of Mental Health City of RochesterCity of Rochester

The Community Preservation Corporation The Community Preservation Corporation First SterlingFirst Sterling

Carriage Factory, Rochester, NYCarriage Factory, Rochester, NYDeveloped by DePaul of RochesterDeveloped by DePaul of Rochester

Construction Sources % Funding AmountCommunity Preservation Corporation 10,350,000Tax Credit Equity 6,396,218Historic Credits 1,535,572State Historic Tax Credits 568,767Deferred Developer Fees 794,141Deferred Capitalized Reserves 263,578City of Rochester 600,000DePaul Equity 1,723,062Deferred Environmental REM 110,000Deferred SONYMA and Legal 30,776Total Sources of Funds: 100% 22,372,114

Construction Sources - DRAFT

Construction Sources % Funding AmountCommunity Preservation Corporation 1,989,412Tax Credit Equity 11,629,489Historic Credits 2,791,947State Historic Tax Credits 1,034,122Deferred Developer Fee 579,082HTFC 2,025,000City of Rochester 600,000DePaul Equity 1,723,062Total Sources of Funds: 100% 29,546,344

Permanent Sources - DRAFT

Norwood Terrace, 3349 Webster Avenue, Bronx, NYNorwood Terrace, 3349 Webster Avenue, Bronx, NY Joint Venture between Concern for Independent Living and B&B SupJoint Venture between Concern for Independent Living and B&B Supportive LLC. portive LLC.

MixedMixed--Use Facility featuring 115 apartmentsUse Facility featuring 115 apartmentsFinancing Partners:Financing Partners:

NYS Homes and Community RenewalNYS Homes and Community RenewalNYS Office of Mental HealthNYS Office of Mental Health

NYS OTDA/HHAPNYS OTDA/HHAPBank of AmericaBank of America

Richman Housing ResourcesRichman Housing ResourcesNYC HPD & FHLB of NYNYC HPD & FHLB of NY

Construction Sources % Funding AmountHFA Construction Loan 48.3% 17,500,000HFA 2nd Mortgage 1.6% 576,000NYS HCR MRT Loan 8.4% 3,042,198NYS HHAC Loan 15.7% 5,684,000HPD SHLP Loan 5.5% 2,000,000FHLB AHP Loan 2.8% 1,000,000Brownfield Mortgage Loan 2.1% 752,915OMH PDG Mortgage Loan 1.0% 344,555Accrued Loan Interest During Construction 2.8% 1,009,464CFIL Equity 0.6% 210,000Deferred Developer Fee Loan 11.3% 4,100,881Total Sources of Funds: 100% 36,220,013

Construction Sources - DRAFT

Construction Sources % Funding AmountTax Credit Equity 38.2% 13,837,804Solar Credit Equity 0.2% 86,135HFA Permanent Loan 6.5% 2,340,000HFA 2nd Mortgage 1.8% 640,000HCR MRT Loan 20.0% 7,250,000NYS HHAC Loan 15.7% 5,684,000HPD SHLP Loan 5.5% 2,000,000FHLB AHP Loan 2.8% 1,000,000Brownfield Mortgage Loan 2.1% 752,915NYSERDA Mortgage Loan 0.4% 138,000OMH PDG Mortgage Loan 1.0% 344,555Accrued Loan Interest During Construction 2.8% 1,009,464CFIL Equity 0.6% 210,000Deferred Developer Fee Loan 2.6% 927,140Total Sources of Funds: 100% 36,220,013

Permanent Sources - DRAFT

WORKING WITH THE COMMUNITYWORKING WITH THE COMMUNITY

• Meet with individuals before you meet in larger meetings

• Look for supporters and encourage them to speak out

• Identify community interests and work in to presentations – jobs, elimination of blight, security, business opportunities

Strategies used to overcome oppositionStrategies used to overcome opposition

• Develop relationship with media• Correct misconceptions and get accurate

information out• Use visual presentations to show what is

planned and address all concerns• Show how program fits in with community plans

capital investment, jobs and good will• Convince locality that they will not prevail and

that Federal laws are on your side