Apex Building Group and L+M Development secure $217 million financing for phase three of the Alafia project

Brooklyn, NY Apex Building Group and L+M Development Partners LLC secured over $217 million in financing for the third phase of the Alafia project, a wellness oriented affordable housing community in East New York that they are developing in partnership with RiseBoro Community Partnership and Services for the Underserved.

Phase 3 will consist of two residential buildings delivering 273 units of affordable housing. Both buildings will be built to passive house standards and will utilize a  geothermal loop system for energy efficient heating and cooling. This phase will also feature the construction of a one-acre public park, which will include a one-mile fitness loop, children’s play area, and residential courtyards. Construction on Phase 3 is expected to be complete in 2029.

“Alafia is a transformational project and we’re proud to act as developer and GC of its third phase. We are excited to continue to build projects to passive house standards and provide a new park that will benefit the wider community. We would like to thank the East New York community for their continued support and our financing partners for their innovative approach, as this is the first Alafia phase to be structured using the 25% test,” said Kuza Woodard, vice president of development at Apex Building Group.

“With Alafia, we are taking a holistic approach to community development by providing some of New York’s most vulnerable residents with access to high-quality, affordable housing and services such as community-based healthcare and an urban farm all in one place. This project wouldn’t be possible without the support of our partners. We are excited to move into the next phase with them, which will bring more affordable housing and significant public space to the community,” said Jessica Yoon, managing director at L+M Development Partners.

Located on a 27-acre site in the Spring Creek section of East New York, and adjacent to the Gateway Center and the 407-acre Shirley Chisholm State Park, Alafia will be situated on the former site of the Brooklyn Developmental Center at 888 Fountain Ave.

Upon completion of all phases, the Alafia redevelopment will bring approximately 2,600 units of affordable housing, 50,000 s/f of commercial and community facility space, including the new One Brooklyn Health medical facility and a senior center, over 20,000 s/f of open and urban agriculture space, and several thousand square feet of retail space to East New York.

All housing units will be 100% affordable and the majority will be available to households earning up to 70% or less of area median income (AMI).

New York State Homes and Community Renewal is supporting the project through its Federal Low-Income Housing Tax Credit program, which is expected to generate $97 million in equity, its State Low-Income Housing Tax Credit program, which is expected to generate $14 million in equity, $57 million in tax-exempt bonds, and $66 million in subsidy. 

Additional project financing includes construction loans through Redstone Bank, funding through Goldman Sachs Urban Investment Group, and New York State Energy Research and Development Authority’s NY-Sun incentives. 

“This project will create affordable housing for more than 270 households while also prioritizing health and wellness - helping us reach the goals of our Vital Brooklyn initiative. The $217 million investment includes modern and sustainable apartments, as well as recreational and green space that promote togetherness. We thank our partners for their dedication to this important project,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas.

Alafia is part of the state’s $1.4 billion Vital Brooklyn Initiative, a comprehensive community development program designed to address social, economic, and health disparities in Central Brooklyn by building thousands of affordable homes and integrating community services.

“Alafia demonstrates how strategic public-private partnerships can transform underutilized sites into vibrant neighborhoods that expand opportunity for New Yorkers. As this next phase moves forward, hundreds of additional affordable homes, thoughtfully designed public spaces and sustainable infrastructure will help strengthen East New York while advancing New York State’s commitment to creating healthy, resilient places where families can thrive,” said Empire State Development president, CEO and commissioner Hope Knight.