L+M Development Partners and Invesco Real Estate To $1.2 Billion Deal

Pending Sale of Roosevelt Landings May Boost Island Affordability But Is Far From Guaranteed

Thursday, August 1, 2019 - 15:24 Updated 35 weeks ago David Stone

South section of Roosevelt Landings at street level.

Media reports, from Curbed to Bloomberg, tout the sale of five properties, including Roosevelt Landings, as a done deal, but it's far from it. Complex negotiations are ahead, and the local deal is an outlier that may be more difficult.

If completed, the pending sale of Roosevelt Landings -- as Eastwood, the "E" in the original WIRE buildings -- can be the most significant boost in affordability for the community since the first buildings went up.

It's significant because it may return the apartments lost in the Mitchell-Lama conversion to affordability. That's a reversal at the core of the transaction itself, one that goes contrary to convention in the industry.

50% of Roosevelt Landings is affordable as Section 8 Voucher Housing, a federal program that also supports 2 and 4 River Road in Manhattan Park. Another 100 apartments are also subsidized. This leaves the Island's largest residential complex with a potential for about one-third converting back to affordability.

The sale, which should close within three months, does not hinge on an affordability agreement's successful completion. It's expected that L+M and Invesco will move ahead with the purchase in any case.

Advantages for new investors include significant improvements to Roosevelt Landings infrastructure and to the affordable units already completed by Urban American, the current owner which has a commitment to affordability similar to L+M's.

Why Roosevelt Landings Is Different

The inspiration behind a move from market rate to affordability, opposite current trends, is the dusting off of a "1960s-era city tax exemption program," according to a more responsible report in the Wall Street Journal. (The Daily thanks reader Sylvan Klein for the tip.)

Article XI, according to the Journal, "allows the city to negotiate individual deals with property owners, where the city seeks to balance the cost of lost tax revenue with the benefit of rents set at no more than 30% of median income for renter households who meet specific income limits."

But while that applies to the other four complexes in the sale, it does not apply to Roosevelt Landings because it falls under State authority.

In that case, you might want to buckle up your seatbelts, recalling how negotiations with the state tumbled and nearly fell for Westview. An affordability deal widely approved by residents squeaked through only at the last minute, requiring an emergency RIOC Board Meeting. A year later, Westview residents have still not gotten a final offer.

State negotiations are being handled by Homes and Community Renewal, RIOC's parent, and RIOC's spokesperson says they've seen nothing more than media reports.

But sources tell us that there's reason to believe that times have changed with politics in Albany that may lead to smoother negotiations, this time around. A Cuomo administration that's moved left under progressive pressure may see the benefits of an affordability deal differently.

Conclusion

We expect our local elected representatives to weigh in, although none have yet responded to requests for comment.

But we did hear from Roosevelt Landings manager Doryne Isley.

"Unless asked to leave I will still be here," Isley commented on her future after the sale, a position likely to add stability during a period of change.