Lighthouse Point Phase 1

Sponsor: Triangle Equities Development Co

Type of QALICB: Real Estate - Supermarket

Owner: Triangle Equities Development Co

City and State: New York City, NY

Contact Person: Joshua Weingarten

Phone: 718.463.5757

Contact Email: [email protected]

Allocation Amount Requested: $40 million

Brief Description of QALICB:

Lighthouse Point is the first phase of the NYC Economic Development Corporation (NYCEDC) and Triangle Equities  comprehensive development plan to revitalize St. George as a commercial and residential center within Staten Island. Lighthouse Point will be the catalyst and anchor for the revitalization of this waterfront community into a dynamic civic hub that will drive economic growth, create thousands of high impact jobs, support existing waterfront amenities and foster new uses to the benefit of visitors and residents alike. 
Phase 1 of Lighthouse Point will create approximately 220 direct, permanent jobs and will transform a long-vacant and underutilized site at the base of the Staten Island Ferry Terminal into a transit-orientated, $80 million mixed-use, mixed-income commercial & residential facility and thus spur the capital investment necessary for the community to achieve a full recovery from devastation wrought by Hurricane Sandy in Fall 2012.  
The second and final development phase aims to reestablish St. George s place in history through restoration and stimulation of the currently vacant United States Lighthouse Depot Complex, a registered National Historic District and NYC Landmark into additional retail & dining options along with the new construction of a 180 room hotel & conference center and the addition of significant public open space connecting the community to the waterfront. In this phase an additional $125 million of project investment will create an additional 600 plus construction jobs and over 240 direct, permanent jobs. The transit-oriented development will capitalize on its proximity to the Staten Island Ferry, Staten Island Rail Road and thirteen local MTA bus lines, and eventually create a New York destination benefiting local businesses through an influx of tourism dollars and eventual substantial private investment in the area.  
Phase 1 is planned to commence during first part of 2015 and will include the construction of two condominium units with separate financing sources: a 60,000 square foot, three-story retail building along Bay Street that incorporates the Lighthouse Depot s historic brick perimeter wall into the building façade and a 12-story, 112 unit, mixed-income residential tower with 20% of the units reserved for families earning 60% AMI.  The retail condominium will be anchored by a theater and a grocery store that will provide nearly 12,000 square feet of supermarket space to a community identified as a priority area by New York City and New York State for increased access to fresh food.  The grocery store will provide this community a full range of offerings including fresh produce, meats & seafood and will be eligible for financial benefits under the NYC FRESH program, State financing through the New York Healthy Food and Healthy Communities program, and federal grants through the Hea  lthy Foo  d Financing Initiative.  The construction of Phase 1 will create a vibrant retail destination and residential hub, and by enhancing the Bay St. and Borough Place frontages, will serve as the foundation for the subsequent phase and truly enable local residents to celebrate St. George s rich history and proudly welcome guests into their community. 
The Project is located in a census tract (000300) that qualifies as an area of high distress under the NMTC program based on the median family income being less than 60% of Area Median Income (51.06%) in the 2010 Census. In addition, the census tract qualifies as a Food Desert based on the NYS Healthy Food/Healthy Communities Initiative and NYC FRESH Program and is located in a FEMA Hurricane Sandy Major Disaster Declaration Area.
Triangle has received all required land use, public design, sub-division and environmental approvals; completed transit and waterfront certification; and, made capital investment of over $6 million to-date.  When complete, Lighthouse Point will spur the revitalization of the St. George area by introducing more than 460 full time jobs to the community and catalyzing significant additional private sector investment, launching Staten Island s north shore on trajectory towards sustainable growth.  Construction of Phase 1 is the necessary first step to achieve these objectives. 

But For Statement:

The NMTC subsidy is essential to project success on a number of levels.  First, due to the geometry and topography of the site, construction costs are unusually high compared to other area developments.  These high costs are further exacerbated as a result of a Staten Island Railroad (SIRR) tunnel running below the site.  In order to ensure that new construction on the site does not damage the tunnel, additional bracing and foundation work will need to be accomplished to support the resulting construction. These additional costs will be offset by the NMTC subsidy.
Secondly, without NMTC financing, the overall financing for the project will have a gap in available capital and the project would not proceed.  The gap between the project costs and the value created by the rents from the project s tenant mix, is so large that without the NMTC subsidy, the Lighthouse Point development could not be built.  For a development in the St. George neighborhood of Staten Island, the projected NOI at stabilization would only qualify for conventional construction financing of an approximate $20 million loan.  Since our project budget for the retail alone is about $41 million, we would then need to invest an additional $12.5 million in equity into the project.  The result of that size of an equity investment would be a negative NPV which indicates that the project can only work with NMTCs.
Lastly, one of the primary goals of the Lighthouse Point development is to provide a fresh foods supermarket to the underserved community of St. George.  In order to entice the supermarket to open in an unproven market, Triangle is proposing to offer below-market rents.  A NMTC subsidy is paramount to our ability to offer the below-market rent, which will not only enable a fresh foods supermarket to open in this distressed area, but also result in the creation of significant job creation for members of the local low-income community.