When the Northgate Apartments were unveiled in Camden, New Jersey, in 1963, they brought great promise as a luxury 21-story building that would help redefine the city.
“At the time, they were trying to put forward this luxury building as this shining beacon of hope and a symbol of good times to come,” said Andy Cavaluzzi, partner and co-founder of New York City-based Hudson Valley Property Group. “It's very visible from the city of Philadelphia when you're crossing the Ben Franklin Bridge. It's very prominent in the skyline.”
However, those dreams were never realized. After a decade or so, the owners of the 321-unit project stopped making any improvements to the building, which became home to many Section 8 voucher holders.
“The property is in disarray,” Cavaluzzi said. “Unfortunately, there's a ton of deferred maintenance. There are situations that need to be dealt with from infrastructure, from aesthetics, from some of the tenants' amenities to just making sure that the residents are living in a safe environment and they have a place that can actually be a real home.”
An arduous process
Despite those issues, there was no shortage of interested parties when Northgate Apartments went on the sales block in 2021. HVPG, which has preserved over 10,500 units across more than 60 properties in the Northeast, mid-Atlantic, Illinois and Florida, acquired the property in January after a two-year process.
“[Two years] was the amount of time it took to get from working through the details of the deal to actually being able to go through to put everything together — the financing packages with lots of different agencies involved to the construction scope of the renovation that has to take place,” Cavaluzzi said.
As with most affordable renovation projects, HVPG needed to layer funding on top of more funding from a variety of government sources. It financed the Northgate acquisition with a mix of federal low-income housing tax credits funded by nonprofit Enterprise Community Partners, Aspire New Jersey state tax credits, and a HUD Federal Housing Administration 221(d)(4) loan originated by PGIM, the global investment management business of Prudential.
“This property did involve quite a few different funding sources, and there's certainly developer equity that goes into it,” Cavaluzzi said.
A vast majority, 96.5%, of the apartments are subject to a new 20-year project-based Section 8 housing assistance payments contract, which ensures renters spend no more than 30% of their household income towards rent. It also has low-income housing tax credit income restrictions through a 30-year compliance period, which means tenants must qualify at 60% of area median income or below to reside at the property.
A heavy lift
HVPG has begun the extensive renovation of Northgate Apartments. But before that happened, the company had conversations with its residents.
“I'm sure they have lots of questions, and they've heard many different rumors,” Cavaluzzi said before the conversation. “So we're looking forward to that.”
HVPG's list of improvements is extensive. It wants to upgrade the facade, but still preserve the essence of the mid-century-era look. The company plans site infrastructure upgrades, mechanical system replacements and a number of in-unit bathroom, kitchen and apartment safety improvements. It will also create fully accessible units and make site improvements to create a fully accessible site.
“They are nice floor plans, they're spacious and they’re well laid out,” Cavaluzzi said. “So I think the floor plan in general is good, but the building inside is very, very tired and in rough shape.”
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