Grenadier negotiates HLP loan for Amalgamated-Riverbend deal

Real Estate Weekly, May 22, 1996

GRC, the managing agent for Riverbend, initiated contact between the two principals and helped negotiate the terms of the agreement. The loan will carry a variable interest rate of prime plus one percent, with no points being charged. The loan term expires on January 31, 1999, and is primarily secured by Riverbend's payments to and funds in the cooperative's replacement reserve.

The loan is for the installation of energy efficient windows at Riverbend, a 624-unit HUD supervised cooperative on the north tip of Fifth Avenue in Harlem. The replacement of the existing windows will result in thousands of dollars in fuel cost savings each year.

Jane H. Krieger, president of Grenadier Really Corp., said "This loan helps open up a new avenue of possibilities for HUD-supervised projects. Private lending sources are needed to supplement government funding if we expect viable developments like Riverbend to grow stronger. I commend all parties involved on their initiative and vision."

Grenadier first approached Amalgamated about the loan in the summer of 1994. After several meetings and visits to Riverbend to determine the exact scope of the work, the basic terms of the loan agreement were worked out in 1995. GRC, the Bank and Riverbend's Board and their attorneys worked together to successfully obtain the approval of HUD and the New York City Housing Development Corporation (HDC), which services the mortgage on Riverbend. The supervising agencies agreed to the loan, clearing the way for the loan papers to be drawn up and signed last week.

Designs for the window replacement project are already in the works. The new energy efficient windows will feature insulated glass and aluminum frames with thermal breaks, helping each unit retain heat while reducing interior noise levels.

"It's a wonderful thing - that GRC was able to put this together so we can get the loan and complete this project much earlier than expected," said Brenda Brown, president of the Riverbend Board of Directors. "It will mean a better quality of life for Riverbend residents.'

Gloria Foster, vice president of Riverbend's Board, also expressed thanks to U.S. Rep. Charles Rangel, U.S. Department of Housing and Urban Development Secretary Henry Cisneros, and NY State Assembly-member Keith Wright for their assistance in obtaining prompt approval from the regulatory agencies. She also thanked the New York regional office of HUD, New York City's Department of Housing, Preservation and Development, and the city's Housing Development Corporation for their cooperation and assistance.

"Riverbend meets the goals of Amalgamated Bank of New York as far as being viable, credit-worthy affordable housing," said Leonard I. Maisel, senior vice president of Amalgamated Bank. "It is the first HUD-assisted housing company that Amalgamated has worked with under the Bank's Housing Loan Program, and for all concerned, the successful result is meaningful and well-earned."

In 1993, working in conjunction with the State Division of Housing and Community Renewal, Amalgamated began a pilot program of providing loans to qualified New York State Mitchell-Lama projects for capital improvements which did not require the placement of another mortgage on the property. Grenadier worked closely with Amalgamated to devise the means by which Mitchell Lama developments can borrow conventionally, especially for energy conservation. One of the initial loans went to the Grenadier-managed Starrett at Spring Creek, a 6,000-unit rental complex in Brooklyn. Grenadier approached Amalgamated when it began to seek financing alternatives for the Riverbend improvements.

The $1 million loan is part of a major capital program being implemented by GRC at Riverbend. In addition to the window installation, Grenadier, through the efforts of its energy management subsidiary, Starrett Energy Services, has coordinated the overhaul of the heating systems at Riverbend, which has resulted in 35 percent savings in energy costs for the cooperative.

Riverbend, built in 1966, contains four high-rise residential buildings, four parking garages, a day care facility, and retail shopping.

Grenadier Realty Corp., one of the largest property management companies in the United States, manages approximately 30,000 housing units and a million square feet of commercial space. It was named a 1995 Property Management Company of the Year for Assisted Housing by the National Association of Home Builders' MultiFamily Council.