ROCHESTER, NY (May 8, 2013) - Exciting renovations are currently underway at Pinnacle Place, a 407 unit apartment building in downtown Rochester. PathStone Development Corporation took ownership of the building from Boston-based Beacon Development in late December. Upgrades to the facility include life safety improvements, completely updated units, and new common areas.
Pinnacle was constructed in 1972 by Beacon Development under the New York State “Mitchell-Lama” and US Department of HUD section 236 programs. The project was designed to serve low and middle-income seniors aged 62 and older. However, as the population of the City changed, the project continued to serve seniors but also people with mental and physical disabilities of any age. When PathStone purchased the property, the majority of tenants were identified as having a disability.
Beacon Development first approached PathStone about the possibility of purchasing the project in 2011. PathStone’s Senior Real Estate Developer, Joe Bowes, recalls the initial conversations, “The City of Rochester and the former New York State Commissioner of Housing and Community Renewal recommended us based on our successful refinancing of Andrews Terrace, a very similar style project.”
As part of the overall financing plan, PathStone would purchase the project, hire the 17 staff currently managing the property, and invest $13.4 million in capital improvements. The upgrades to the facility include new kitchens, flooring, lighting, windows, roofs, painting, life safety improvements, and a completely reconfigured first floor.
Since the project serves low-income elderly and individuals with mental or physical disabilities, 100% of the tenants will have access to Section 8 Rental Assistance through the US Department of Housing and Community Development. “The Pinnacle project was one of the first in the country to go through the Rental Assistance Demonstration (RAD) program with HUD. This Program was specifically designed to help these aging HUD 236 projects get access to additional rental subsidy for the tenants,” said Bowes. This assistance is tied each apartment, not the individual, making it extremely valuable for long-term affordability.
Given the size of project and necessary renovations, PathStone had to find committed public partners. The State of New York and the City of Rochester both understood the importance of this asset to the community. The City was particularly aware of the consequences of letting the property continue to deteriorate or potentially fall into the hands of an absentee owner. As a result, the City of Rochester committed $2 million to the project and agreed to a Payment In Lieu of Tax Agreement. The New York State Housing Finance Agency (HFA) issued tax exempt bonds, provided an allocation of 4% Low Income Housing Tax Credits, and supplemented the financing with a low-interest loan. The Federal Home Loan Bank of New York provided Affordable Housing Program funds through First Niagara Bank which also agreed to issue a Letter of Credit. Working with Nixon Peabody, PathStone decoupled the remaining Section 236 Interest Reduction Payments from the existing mortgage, and was able to secure an additional $2 million in financing.
PathStone’s development partners include: Nathaniel General Contractors, NH Architecture, Lozier Environmental, and EB4 Engineers. PathStone Management Corporation is managing the property and the Section 8 Rental Assistance is administered by the Rochester Housing Authority. Construction is currently underway and expected to take 16 months to complete.
For more information contact:Joseph Bowes
Senior Real Estate Developer