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Banking and Finance Deals & Dealmakers

JV closes on $223M to build nation’s largest passive property

Rendering of Sendero Verde by Handel Architects

L+M Development Partners, Jonathan Rose Companies and Acacia Network announced the closing of $223 million in financing for phase one of Sendero Verde, a 100 percent affordable mixed-use development in East Harlem.

Across all phases, the project will include nearly 700 units of affordable housing, community and social service space, a school, publicly accessible open space, community gardens, and neighborhood retail.

Expected to be the country’s largest development to meet Passive House energy efficiency standards, Sendero Verde’s community offerings, architecture and landscape elements will provide a unique model for the creation of sustainable mixed-income communities through innovative public-private partnerships.

Phase one of the project is expected to begin construction in the coming weeks and be completed in 2022. Sendero Verde was designed by Handel Architects.

The $223 million phase one of Sendero Verde was financed with construction loans from the New York City Housing Development Corporation and the New York City Department of Housing Preservation and Development, with additional Resolution A funding from the New York City Council and grant funding from NYSERDA.

The project is also funded through a letter of credit from Bank of America and a syndication of federal low-income housing tax credits and solar investment tax credits as well as New York State Brownfield Tax Credits to Bank of America.

“With its cutting-edge sustainable features, deep affordability and array of offerings for the community, Sendero Verde will be a Passive House at the forefront of affordable housing development, and is exactly the type of project we strive to develop under Housing New York. We’re transforming one of our largest remaining sites in Manhattan into hundreds of new affordable homes for low-income families, along with open space, community space, a new school, and critical supportive services for vulnerable New Yorkers.” said HPD Commissioner Louise Carroll.

“Sendero Verde was conceived as a complete community of opportunity, a model of the future of affordable housing,” added Jonathan Rose Companies President Jonathan F.P. Rose. “We hope that in the future, all affordable housing has these Green and community serving elements to support its residents’ well-being and opportunities.”

Phase one of Sendero Verde will include 360 units of affordable housing and one superintendent’s unit spread across buildings B-North and B-South, space for a school with a full gymnasium, an area for the venerable community pillar Union Settlement Association, and an 18,000 s/f publicly accessible courtyard featuring a children’s play area, adult outdoor exercise equipment, seating areas and a stage for community events.

Additionally, community garden groups that previously inhabited the vacant lot on which Sendero Verde is being constructed are being relocated within the development in coordination with NYC Parks’ GreenThumb program and local community garden groups.

Phase one of Sendero Verde will provide 30 percent of units to serve extremely low-income households, including many that were formerly homeless. Another 20 percent of units will be available for families earning less than 50 percent area median income (AMI). The remaining units will all be affordable to households earning 60 percent AMI, 80 percent AMI and 90 percent AMI.

Upon completion of its second phase, Sendero Verde is expected to be the largest development in the nation to meet Passive House standards, thanks to its utilization of air-tight construction to reduce draft and energy loss, triple-glazed windows, mechanically ventilated spaces with energy recovery and individually heated and cooled units.

With its sustainable design and the integration of green spaces and gardens, Sendero Verde is expected to use 60-70 percent less energy than a similar building normally would.

“By creating affordable, sustainably designed housing, we can work to both break the cycle of poverty that disrupts so many people’s lives, and dramatically reduce the carbon footprint of large buildings,” said Handel Architects partner Blake Middleton.

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