Developers secure mortgage insurance for Spaghetti Warehouse

CNY Business Journal (1996+), Oct 19, 2007 by Martino, Kristina

SYRACUSE - At the end of September, downstate-based Lakefront Lofts, LLC, secured a $5.05 million mortgage-insurance policy from the State of New York Mortgage Agency, (SONYMA) for renovations at the Spaghetti Warehouse building it is developing at 689 N. Clinton St.

New York City-based Community Preservation Corporation (CPC), which has a Syracuse office, made Lakefront Lofts a $5.05 million construction loan. Following renovations, CPC plans to convert the loan to a permanent mortgage and sell it to the New York State Common Retirement Fund. The mortgage requires mortgage insurance, which Lakefront Lofts has now acquired through SONYMA.

The loan will fund renovation of the top two floors of the three-story downtown building into "affordable-housing" units, according to the New York State Housing Finance Agency.

Long Island-based Harbor Realty Partners LLC and Scarsdale-based Benjen Capital Partners LLC together own Lakefront Lofts LLC and each own a 50 percent interest in this property, according to the state Housing Finance Agency. The Spaghetti Warehouse Restaurant is located on the first level of the building.

The three-story site is a former handbag factory in Franklin Square. The second-floor has commercial and office space, but the owners plan to convert the remaining space into apartment units. The building also has 24 loft apartments located on the third floor.

When completed, the building will have 50 residential units according to the state Housing Finance Agency.

Lender CPC helps develop finance and build affordable multi-family housing. CPC's $5.05 million loan funds the building's construction and purchase of the property.

"Very often a lender requires a mortgage to have insurance. That's the case here,"says Philip Lentz, director of communications for the New York State Housing Finance Agency. "There were problems in the past with previous mortgages that ended up in default."

SONYMA's Mortgage Insurance Fund started in 1978 to promote the preservation and revitalization of communities across the State of New York. The fund provides insurance on single-family mortgage loans to promote home ownership, and on multi-family loans that encourage investment of capital by commercial and public lenders.

CPC and Lakefront Lofts closed onthe construction loan in September. Lakefront's construction loan lasts two years at which point Nicholas Petragnani, regional director of CPC, says CPC would convert the loan to a permanent mortgage and sell it to the New York State Common Retirement Fund.

The Syracuse CPC office has loaned about $210 million since its inception in 1995 and has assisted rehabilitating 5,416 units in the Syracuse area, according to CPC. As of September 2007, the Syracuse office closed 185 loans.