Pinnacle Apartments - Rochester, NY
Pinnacle Apartments was constructed in 1972 under the Section 236 program. Financing was provided by the State of New York through its "Mitchell-Lama" program. The projects consists of 407 units, 163 of which were assisted by a Rent Supplement contract. The project was targeted to seniors, but over the intervening years in addition to serving a senior population housed many persons with disabilities. As the project neared its mortgage maturity the owner was concerned about the ongoing viability of the project and choose to seek a local affordable housing provider to acquire the property and restructure its finances. PathStone Development Corporation, which has developed or preserved over 3,000 units in several states, was selected as the preservation purchaser. The State of New York and the City of Rochester were both committed to preserving this asset as an invaluable resource for housing low-income seniors and persons with disabilities. The RAD program provided a vital tool to facilitate this preservation transaction. Since the development was occupied by elderly and disabled residents it qualified for 100% project-basing under RAD. The Rochester Housing Authority agreed to administer the project-based voucher (PBV) contract. The existence of the PBV contract helped to secure favorable financing from the New York State Housing Finance Agency (HFA) through the issuance of tax-exempt bonds, with attendant 4% Low Income Housing Tax Credits. The City of Rochester provided an additional low interest loan and a PILOT agreement, and the Federal Home Loan Bank provided Affordable Housing Program funds. Working with Nixon Peabody, PathStone decoupled the remaining Section 236 Interest Reduction Payments from the existing mortgage and closed on this transaction in early December of 2012. In addition to financing the acquisition of the property the transaction funded over $30 million in rehabilitation of the aging property. The 236 Use Agreement will govern the project's operations until 2021, and the HFA Regulatory Agreement will ensure ongoing affordability of the property for an additional 40 years.