More than two years after purchasing a Crown Heights development site, Hudson Companies has assembled construction financing to beat the deadline of a valuable tax abatement.
Hudson scored $135 million in construction financing from Santander and an affiliate of Related Companies, Crain’s reported. Santander provided $85 million for the project at 975 Nostrand Avenue, while Related Fund Management provided the remaining $50 million.
A Cushman & Wakefield team including Gideon Gil and Zachary Kraft arranged the financing.
The mixed-use project is planned for nine stories and 328 apartments. Amenities will include a yoga room, karaoke room and library.
There will also be commercial space, including a supermarket and a community facility. Residents will be able to park in an underground garage.
Construction began in August 2022 and is expected to wrap by next fall. The deadline is critical, as Hudson needs to finish the project by June 2026 if it wants to reap the benefits of the 421a tax program. While the tax benefit has since expired, projects that started early enough can still qualify for the benefit if construction is completed by the deadline.
According to the 421a program’s conditions, 30 percent of the apartments will be set aside for affordable housing. They will be reserved for households earning up to 130 percent of the area median income.
Hudson purchased the development site from Midwood Investment & Development for $41.5 million in September 2021. The site was mired in controversy because of a dispute between the developer Midwood and Associated Supermarkets, which was in danger of being displaced by Midwood’s redevelopment plans.
Since then, the supermarket has permanently closed. Hudson seemed poised to honor a deal to keep the store in place and will likely seek a similar tenant for the space.
Last year, Hudson refinanced its construction debt at 350 Clarkson Avenue in Flatbush. Retirement savings investor Athene Annuity provided $72.5 million on the eight-story, 250-unit property.