NYCCRC Approves First Loans to Help Two Major Not-For-Profit Organizations Expand
Projects Expected to Create 142 Jobs and Spur Nearly $73 Million in Private Investment.
NYC Industrial Development Agency to Help Three Not-For-Profit Organizations and One Industrial Company Expand, Creating and Retaining About 500 Jobs.
New York City Capital Resource Corporation (CRC) today approved financing assistance for Maimonides Medical Center and New York Blood Center to help the organizations to expand and improve services and to create jobs. The projects are the first approved by CRC, which was formed earlier this year to make it easier for not-for-profit organizations to access tax-exempt financing. The two organizations plan to invest a combined $72.7 million in Brooklyn and Queens, creating 142 new jobs. New York City Industrial Development Agency (IDA), the board of which is identical to that of CRC, today approved financing assistance for three not-for-profit organizations in Brooklyn and Manhattan and an industrial company in Queens. The expansion projects are expected to create 21 new jobs, retain 477 existing jobs and spur about $109 million in private investment.
“Diversifying the economy is an integral part of the Bloomberg Administration’s economic development strategy, and supporting growing engines of our economy like the not-for-profit sector is one of the best ways we can do that,” said Andrew M. Alper, CRC and IDA Chairman. “New York City has nearly 40,000 not-for-profit organizations that employ nearly 20 percent of the City’s workforce, and through the new loan program offered by CRC, we have another way to help them grow and create additional jobs. I’m thrilled CRC is helping two of New York City’s major not-for-profit organizations – Maimonides Medical Center and New York Blood Center – expand their services, and I anticipate the projects will be the first of many.”
Through its Loan Enhanced Assistance Program (LEAP), CRC issues tax-exempt bonds backed by direct loans to participating entities with pre-negotiated documentation, lowering transaction costs and relieving organizations of the obligation to develop customized financing structures with their own underwriter and letter of credit bank or other credit enhancer as is generally necessary with existing IDA programs. CRC and IDA are administered by the New York City Economic Development Corporation (EDC).
Maimonides Medical Center, a Brooklyn-based teaching hospital, will use about $31.2 million in CRC tax-exempt bond financing to build and renovate several facilities on its campus. Maimonides plans to build an approximately 90,000-square-foot facility for clinical and support services, renovate another 926,000 square feet of clinical, medical education, administrative, infrastructure and parking facilities, and construct a new, 1,200-square-foot two-story bridge connecting two buildings across 48th Street. Maimonides also plans to renovate three additional facilities used to provide clinical, medical education and administrative services. The project will help the hospital enhance the healthcare services it provides and retain its 4,858 jobs, in addition to creating 127 new positions.
New York Blood Center (NYBC), a Manhattan-based not-for-profit organization that provides blood transfusion products and services to the New York Metropolitan region, plans to use up to $10 million in CRC tax-exempt bond financing to renovate and equip a 75,000-square-foot portion of a larger facility in Long Island City. NYBC plans to use the space for laboratory, processing and storage space for blood, meeting and training rooms and other uses. The total project cost is expected to be $41.5 million, and NYBC will finance $31.5 million of that cost with a bank loan. The project allows the organization to retain 175 jobs and create 15 new ones.
“The programs offered by CRC and IDA are important financing tools that allow us to help a wide array of organizations and businesses expand and create jobs throughout New York City,” said Steven M. Berzin, CRC and IDA Executive Director. “The ability of CRC to issue tax-exempt bonds backed by direct loans broadens the spectrum of financing opportunities previously available through IDA. The two inaugural projects approved by CRC and four projects approved by IDA will result in private investment of more than $180 million and new jobs in Brooklyn, Queens and Manhattan.”
IDA approved the sale of up to $50 million in bonds on behalf of Sephardic Community Youth Center as well as a mortgage recording tax waiver of about $1.1 million to help the Brooklyn-based community center renovate its three-story building on Ocean Parkway, and build and equip an adjacent four-story facility on Seventh Street. The project will allow the organization to retain 154 jobs, expand its childhood day-care, senior adult and special needs facilities and build a new gymnasium and new youth activity and game rooms.
New York Congregational Nursing Center (NYCNC), which provides medical services primarily to Medicaid clients, will use the proceeds from the sale of up to $20 million in tax-exempt bonds to renovate the rehabilitation wing of its facility on Linden Boulevard in Brooklyn as well as refinance existing debt. IDA also granted the organization a mortgage recording tax waiver of about $517,000. The new wing will allow NYCNC to offer physical, occupational, speech and cognitive therapy to between 55 and 60 people a day. In 2005 the organization received approval from the New York State Department of Health for a Long Term Health Care Program, and the project will allow the nursing center to expand that service to 100 low-income people in the community. The organization will retain its current workforce of 243 and add two jobs as a result of the project.
IDA approved the sale of about $5.9 million in bonds on behalf of The Gillen Brewer School and a mortgage recording tax waiver of about $164,000 to refinance the costs associated with the acquisition of a two-story condominium unit in a building on East 92nd Street in Manhattan. The school, which caters to students with special needs from the ages of two to ten, has experienced increased enrollment and, as a result, outgrew its facility on 93rd Street. The new, state-of-the art facility, which has allowed the school to serve 84 students, up from 48 at its old building, is comprised of nine newly-equipped classrooms, ten therapy rooms, multiple gymnasiums, a computer lab, a library, a music and art room and administrative offices. The school plans to add 3 positions to its staff of 55.
Furniture Design by Knossos, a manufacturer and installer of custom furniture for designers and architects, will receive sales and real estate tax benefits of about $1.3 million and a mortgage recording tax waiver of about $81,000 to buy and renovate a 28,000-square-foot facility on the Brooklyn Queens Expressway West in Queens. Knossos currently leases a facility in Long Island City, but it cannot accommodate the company’s current growth. The company explored moving operations to a location in Ridgefield Park and Paterson, New Jersey, but IDA benefits will allow it to remain in Queens, keeping 25 existing jobs and creating 16 new ones. In addition to tax benefits, the company may also qualify for about $68,000 in discounted energy from the Business Incentive Rate (BIR) program and about $48,000 from the City’s Energy Cost Savings Program (ECSP).
About CRC and IDA
New York City Capital Resource Corporation (CRC) provides financing assistance to not-for-profit organizations with the potential to provide assistance to industrial companies. CRC issues tax-exempt bonds backed by direct loans to participating entities through its Loan Enhanced Assistance Program (LEAP). New York City Industrial Development Agency (IDA) provides financing assistance to businesses, including small industrial and manufacturing companies and not-for-profit organizations. IDA is a conduit agency that issues tax-exempt industrial revenue bonds to assist eligible commercial, industrial, not-for-profit and other qualified entities to finance expansion opportunities. IDA also offers qualified companies abatements on sales, real estate and mortgage taxes. To request information and details on CRC or IDA programs, call (212) 312-3600 or e-mail [email protected].