Schumer Announces Penn South Has Officially Closed on Federal HUD Loan

Press Release

U.S. Senator Charles E. Schumer today announced that Penn South has officially closed on a loan from the U.S. Department of Housing and Urban Development. Earlier this year, Schumer successfully pushed the Office of Management and Budget (OMB) to approve refinancing agreement for Chelsea's Penn South cop-op, which helps ensure the development remains affordable for an extended period. Prior to his push, Schumer explained that HUD, the lender, the City of New York and the Penn South co-op had negotiated an agreement to keep the property affordable and HUD had sent its terms of the agreement to OMB for approval. Schumer successfully pushed OMB to quickly review and approve the negotiations.

"Now that HUD has signed, sealed and delivered the HUD loan we pushed for -- and needed to keep Penn South affordable for thousands of New Yorkers for years to come -- we can all breathe a sigh of relief. Penn South is one of the last remaining middle-class havens in New York City and, with this news, we know this oasis of affordability will remain the wonderful place to live as it has been for decades," said Senator Schumer. "Places like Penn South -- that provide a safe and affordable place to live for middle-class New Yorkers-- are increasingly rare and precious. So when the community leaders and building management called and asked for help to get this deal done with the feds I made it one of my very top priorities."

"Penn South has a rich history, and is a model affordable housing community. With this HUD loan, we have the means to continue our original mission of providing quality homes to moderate-income New Yorkers for decades to come," said Brendan Keany, General Manager.

"The HUD loan will stabilize the finances of the co-op and ensure that Penn South is both well-maintained and affordable. It's a win-win for our shareholders, and for New York City as a whole. Penn South is a wonderful place to live and I am proud that the opportunity to be a part of this community will be available to another generation of middle-class New Yorkers," said Morris Benjamin, Board President.

"Affordable housing like Penn South is what makes New York's neighborhoods the vibrant, inclusive, and dynamic places they are" said Mirza Orriols, HUD Deputy Regional Administrator for New York and New Jersey. "Preserving this kind of housing and the opportunity it creates is at the core of HUD's mission, and today we celebrate a victory that will keep Penn South affordable for decades to come."

As part of the refinancing agreement, the current affordability provisions would remain in place for the full 35- year term of the HUD loan, and Penn South would be able to reduce its current debt payments by over $3 million per year, and lock in current interest rates. Over the next ten years, the cumulative savings of $30 million will finance vital infrastructure improvements to keep the development well-maintained. The savings from this loan, in combination with the annual property tax abatement from the City, will enable Penn South to continue its mission to provide quality affordable housing to another generation of New Yorkers. The 55 year old cooperative complex in Chelsea is one of the last remaining middle-class affordable oases left in New York City.

Penn South is a cooperative (co-op) development located between Eight and Ninth avenues, and West 23rd and West 29th streets, in the Chelsea neighborhood of New York City. The ten building development was built more than fifty years ago, in 1962, and includes 2,820 units of affordable housing.

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