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Homes and Community Renewal

NYS, HPD, SBH Health System, L+M Development Partners and Hornig Capital Partners Announce Comprehensive Mixed-Use Development to Transform Health Care in the Bronx

July 11, 2016

The St. Barnabas Wellness Care Project Includes 450,000 sq. ft. of New Affordable and Supportive Housing, Expanded Medical and Wellness Services

Promotes Stable, Quality Housing as a Preventative Health Strategy to Help Reduce Medicaid Costs and Avoidable Hospitalizations

Bronx, NY— New York State Homes and Community Renewal (HCR) and New York City’s Department of Housing Preservation and Development (HPD) joined SBH Health System (St. Barnabas Hospital), L+M Development Partners and Hornig Capital Partners to announce the St. Barnabas Wellness Care and Affordable Housing project, a new $156 million, mixed-use development that incorporates affordable and supportive housing with a range of on-site services aimed at easing health disparities and promoting wellness. The project is designed to address both the current and future needs of St. Barnabas Hospital and is in line with the state’s effort to reform New York’s Medicaid program from one that rewards volume to one that rewards keeping communities healthier.

The development will convert two parcels of underused land adjacent to the existing medical center into 100 percent affordable housing, with a total of 314 units for low-income households at or below 60 percent of the area median income (AMI). In addition, 30 percent of the units will be set aside for formerly homeless individuals and families. The medical space, affordable housing and on-site programs will focus on preventative care and wellness with the goal of stemming physical and mental health issues that have plagued communities in the Bronx for generations, including: lung disease, asthma, heart disease, stroke, and diabetes.

“In tune with Governor Andrew M. Cuomo’s vision, we take a holistic approach to the developments we finance,” said HCR Commissioner James S. Rubin. “The St. Barnabas development is good for the State, good for the City, good for the Bronx, and will be great for the people who will live here. Providing better, more wide-reaching and accessible health care, healthy living services and education for the community and the residents – who will include formerly homeless single adults and families, and low-income households – is not only the only right thing to do from a humanitarian perspective, it also allows the state to realize the Medicaid savings that are used to fund developments such as this one. We know, and our partners know, that this provides a clear and real benefit to all New Yorkers.”

“The combination of supportive housing and preventive health care is going to have a significant and positive impact on people living in the Bronx who struggle with chronic diseases, including those impacted by mental illness,” said NYS Commissioner of Health Dr. Howard Zucker. “This initiative demonstrates the state Department of Health’s ongoing commitment to its MRT supportive housing program, which leads the nation in its investment in the social determinants of health.  Preliminary results show supportive housing is reducing avoidable ER and hospital inpatient use for our high-cost Medicaid members, which is consistent with our goals for the program.”  

“We are so pleased to be part of a project that provides more than 300 affordable homes to low-income New Yorkers while also improving on the already-strong healthcare services offered by St. Barnabas in the Bronx,” said HPD Commissioner Vicki Been. “Affordable housing and medical care continue to be two of our most pressing societal needs, and this development will offer both to this thriving neighborhood for generations to come.”

“This project will be one of our borough’s premier new developments,” said Bronx Borough President Ruben Diaz Jr. “The synergism of housing, wellness and commercial components is a unique concept and one that will realize not only affordable rental housing for my constituents, but also a health and wellness enriched environment with retail servicing the needs of the community.  I am particularly supportive of the project’s wellness and green components, which reinforce my #NOT62 Campaign for healthy living. I am proud to be providing this project $1 million in capital funding, and I look forward to working with SBH Health System, L+M Development Partners and Hornig Capital Partners towards its completion.”

The development will proceed on two underutilized sites at 4451 Third Avenue and 4439 Third Avenue in the Belmont section of the Bronx. The North Site, located at 4451 Third Avenue will contain a two tower, 7 to 11-story building with 181 units of affordable housing. SBH Health System will operate approximately 57,000 square feet of community facility space in the building, including an ambulatory care center, a pediatric center, a women’s health center, and a Mind-Body center equipped with indoors and outdoor fitness areas and a teaching kitchen. Much of the fresh produce used in the teaching kitchen will be grown on the building’s rooftop farm operated by Project EATS. The building’s rooftop will also contain a terrace for residents of the building.

In line with the project’s overall mission to provide stable, affordable housing and on-site services as a preventative care strategy, SBH Health System plans to open a patient education center to engage patients as partners in their own care and treatment, which studies have shown can improve health outcomes. SBH Health System will also operate an approximately 10,800 square-foot outdoor terrace designed to accommodate stress reduction activities through the inclusion of a walking path, yoga pavilion, and multi-use area for meditation and Tai Chi.

The North Site will include approximately 10,000 square feet of commercial space for a local pharmacy, healthy food café, and other retailers. The healthy food café is envisioned as a new dining option for people living and working in the area and as a source of prepared to-go meals.  The prepared meals are intended to provide an easy, healthy and affordable family meal as an alternative to a fast food dinner. A weekly farmer’s market will also serve to enhance access to fresh produce for the wider neighborhood. 

The South Site, located at 4439 Third Avenue, will include a 12-story residential building with 133 units of affordable housing and an extended-hours daycare— with outdoor space— to accommodate hospital staff, patients and working families who need childcare at off-hours. Amenities for residents will include outdoor recreation space, a laundry room, bike room, and community room.

The development will contain 95 units of housing for formerly homeless families and individuals across both sites. Built as part of the state’s NY/NY III Supportive Housing agreement and the city’s Our Space Initiative, the supportive housing component will be managed by BronxWorks, a human service and settlement house based in the Bronx that will provide on-site services, including: case management, medicine and financial management, employment training, counseling, group activities and benefits assistance, among other things.

“There is no better way to mark our 150th anniversary than with this partnership to positively transform health care in the Bronx,” said Dr. David Perlstein, President and Chief Executive Officer, SBH Health System. “This expansion will provide the primary care and mental health resources needed to make the Bronx a healthier place for residents of all backgrounds. We thank L+M Development Partners and Hornig Capital Partners for working with us to make this new development possible.”

“This project adds to the thousands of affordable homes we've built in the Bronx to strengthen communities and help provide essential services,” said Ron Moelis, CEO and Founding Partner of L+M Development Partners. “From new healthy food options to the tobacco-free policy, we’ve taken a top-to-bottom approach to help Bronxites engage in a healthier daily routine, improve access to vital health care services and give working families a fresh start in a new home.”

 “We are proud to be part of this dynamic mixed-use development that will expand important community services and provide vibrant new residential, healthcare and health conscious retail space,” said Daren Hornig, Managing Partner of Hornig Capital Partners. “These developments in collaboration with SBH Health System will truly activate these sites and bring long-term benefits to the neighborhood and the future of the new Bronx.”

Both buildings will be designed using active design concepts to encourage the use of stairways; include advanced air filtration to help combat vehicle emissions; and use an interior paint that breaks down air pollutants. Solar panels will be installed at both sites. The developers anticipate Enterprise Green Communities-certification and will participate in the Multifamily NYSERDA program. The project was designed by Dattner Architects.

New heath-oriented infrastructure is needed now more than ever. Around 26 percent of adults in the Bronx are in poor or fair health, compared to 16 percent statewide and 10 percent nationwide, according to a recent study by the University of Wisconsin and the Robert Wood Johnson Foundation. Last year, Bronx County was ranked the least-healthy county among New York State’s 62 counties for the sixth year in a row.

L+M Development and Hornig Capital Parnters are also supporting the goal of creating a healthier community by ensuring that both residential buildings will be smoke-free and that no cigarette smoking will be allowed anywhere outdoors on either site. Additionally, the sale of cigarettes and other tobacco products will not be permitted in any of the retail spaces in the new development. The site also incorporates below-grade parking, no idling zones, and bike parking.

The total development cost is $156 million. NYS Homes and Community Renewal provided $71.7 million in fixed-rate, tax-exempt bonds and a mortgage loan – including a $20.8 million permanent loan – through its Housing Finance Agency (HFA), Low-Income Housing Tax Credits (LIHTC), $7.5 million in Medicaid Redesign Team (MRT) funds, $1.5 million in Urban Community Investment Funds (CIF) for the construction of the retail component, and additional subsidy. New York City’s HPD provided $36.8 million in subsidy. Along with developer subsidy, the Bronx Borough President provided a $1 million loan and New York State Energy Research and Development Authority (NYSERDA) awarded $282,000. Wells Fargo is the private construction lender providing credit enhancement for the tax-exempt bonds.

The St. Barnabas Wellness Care and Affordable housing development is part of Governor Cuomo’s unprecedented commitment to affordable housing and community renewal, which includes $20 billion in the 2016-17 state budget for comprehensive statewide housing and homelessness action plans. Over the next five years, the $10 billion housing initiative will create and preserve 100,000 affordable housing units across the State, and the $10 billion homelessness action plan will create 6,000 new supportive housing beds, 1,000 emergency beds, and a variety of expanded homelessness services.

The project advances the goals of Mayor Bill de Blasio’s Housing New York: A Five-Borough, 10-Year Housing Plan to create and preserve 200,000 affordable housing units over the next 10 years. The most comprehensive affordable housing plan in the City’s history and largest municipal housing plan in the nation, its goal is to help address New York City’s affordability crisis by housing more than half a million New Yorkers, ranging from those with very low incomes to the middle class – all of whom face increased pressures due to ever-rising rents.

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About NYS Homes and Community Renewal
New York State Homes and Community Renewal (HCR) includes the Affordable Housing Corporation, the Division of Housing and Community Renewal, the Housing Finance Agency, State of New York Mortgage Agency, Housing Trust Fund Corporation and others. 2016 marks the fourth year of Governor Cuomo’s $1 billion statewide House NY program, whose goal is to create or preserve 14,300 affordable units by 2018. In 2015, HCR set a record for financing the creation or preservation of more than 11,000 affordable homes and apartments and was the #1 bond issuer in the nation with $2.5 billion issued. The agency stands ready to make good on the Governor’s new $10 billion 100,000 unit House NY 2020 commitment. For more information on HCR programs and initiatives, please visit: http://www.nyshcr.org/.

About NYC Department of Housing Preservation and Development
HPD is the nation’s largest municipal housing preservation and development agency. Its mission is to promote quality housing and diverse, thriving neighborhoods for New Yorkers through loan and development programs for new affordable housing, preservation of the affordability of the existing housing stock, enforcement of housing quality standards, and educational programs for tenants and building owners. HPD is tasked with fulfilling Mayor de Blasio’s Housing New York: A Five-Borough Ten-Year Plan to create and preserve 200,000 affordable units for New Yorkers at the very lowest incomes to those in the middle class. For more information visit: www.nyc.gov/hpd.

About SBH Health System
As the flagship in the SBH Health System, St. Barnabas Hospital is a 422-bed, not-for-profit, nonsectarian, acute care community hospital and Level I Trauma Center authorized to treat the most critically ill and severely injured patients. The campus is home to a seven-story ambulatory care facility and a modern 40-station dialysis treatment center. Through SBH Behavioral Health, it is one of the largest mental health providers in the Bronx.  Primary care, specialty services and behavioral healthcare are also offered at Southern Medical Group in the South Bronx.  As a State-designated Stroke Center and State-designated AIDS Center, St. Barnabas Hospital provides access to much-needed services in its community. U.S. News & World Report has ranked St. Barnabas Hospital among the top fifty in the country in the treatment of diabetes and endocrine disorders. Another notable accomplishment is the low rate of caesarean sections performed in SBH’s maternity pavilion compared with other hospitals in the state. For more information, please visit: http://www.sbhny.org.

About L+M Development Partners
Since its founding in 1984, L+M Development Partners, Inc. has been an innovator in developing quality affordable, mixed-income and market rate housing, while improving the neighborhoods in which it works. A full-service firm, L+M works from conception to completion, handling development, investment, construction and management with creativity that leads the industry. L+M is responsible for more than $4 billion in development, construction and investment, and has created or preserved more than 15,000 high-quality residential units in New York’s tri-state area, the West Coast and Gulf Coast regions. L+M brings a superior level of commitment to its investments in developments, and equally important, to its investment in people. For more information, please visit: http://lmdevpartners.com

About Hornig Capital Partners
Based in New York, Hornig Capital Partners LLC (HCP) is a privately-held real estate development firm specializing in value-added investments in the New York metropolitan area and choice markets throughout the U.S. Led by Daren Hornig, a real estate industry veteran with more than 25 years of experience, HCP pursues purchases of fee simple interest assets, as well as select joint venture structures, with capital appreciation opportunities and risk adjusted returns. It also invests in stabilized assets for long-term property appreciation and to effectively recapitalize existing properties with owners to maximize returns. In the past three years, HCP has successfully closed on more than $500 million worth of property and development projects. For more information, please visit: www.hornigcapital.com