Developer in contract to buy Hempstead Village affordable apartment complex plans $23M in upgrades

A New York City-based investment group is in contract to purchase a Hempstead Village affordable apartment building that some stakeholders say has fallen into disrepair. 

Hempstead Preservation LLC, an affiliate of Hudson Valley Property Group, plans to invest $23 million into renovating the 420-unit apartment complex at 100 Terrace Ave. Total costs for the project are estimated at $146,686,722, including $107 million for the building purchase. 

Local officials said the renovations will benefit tenants in the building, which, according to federal reports, faces issues from cockroach infestations to water damage. Residents also have complained about security issues and broken elevators in the building.

Tenants will not need to move during the 18 months the renovations will be taking place, HPVG told the Hempstead Industrial Development Agency at a recent meeting. 

The Section 8 building is home to tenants who make no more than 50% of Long Island's area median income, which is up to $62,500 for two people, said current building owner Peter Florey, founder of The D&F Development Group in Levittown.

Tenants in the building pay up to 30% of their income toward rent, which could be "as little as $25 per month up to ... $1,500 per month for households at the maximum income," Florey said. The balance is covered through a contract with the U.S. Department of Housing and Urban Development. 

Florey said the closing on the building should take place within the next few months.

Will Bailey, who works with tenants in the building through nonprofit New York Communities for Change, said some have expressed concerns that the upgrades could lead to rent hikes and displacements. 

The Hempstead IDA awarded the developer up to $503,406 in sales tax exemptions for renovations, records show.

The developer did not respond to interview requests but said in IDA application documents it is “committed to providing high quality, sustainable, low to moderate income housing to individuals and families.”

Issues cited in HUD reports

The 635,711-square-foot complex built in 1972 was last renovated in a $15 million investment with the help of federal tax credits and tax-exempt bonds after it was purchased by Terrace 100, L.P. in 2006, Florey said.

Without continued access to those low income housing tax benefits through the Federal Low Income Housing Tax Credit Program, his development group sought potential buyers who could renovate the building, he said.

Longtime resident Patricia Hill, 63, said the building "has tremendous problems," describing issues including broken elevators, poor security, and poor maintenance of public areas like the halls and parking garage.

“I’m handicapped. I use a rolling walker and [the elevator] doesn’t stop on my floor,” she said. 

In the most recent assessments by HUD, which regularly inspects subsidized buildings, the building scored 62.51 out of 100 in 2022 and 65 in 2023. The minimum passing score is 60.  

Failing the inspection — which encompasses "structural conditions, maintenance, safety, and environmental quality" — could mean penalties or required follow-up actions, according to NSPIRE Experts, a HUD compliance company. 

The federal agency in its reports, which Newsday obtained through a public records request, noted issues including roach infestations, damaged hardware or locks on doors, and water damage such as mold and mildew. 

Newsday filed a public records request for tenant complaints about the building with the Village of Hempstead in June. The village has not yet fulfilled the request. 

Recent elevator repairs may have meant they were out of service while undergoing work, Florey said, and his development group in the past few months invested over $1 million in renovations to the building's upper parking garage and heating system and added more emergency lighting in the building, which employs 24/7 security personnel.

Management tests for mold as needed, but hasn’t found any issues, he said. 

Public support for renovations

Improvements planned by Hempstead Preservation LLC will include kitchen and bathroom upgrades, increased security, free Wi-Fi, and repairs to elevators and the parking garage, said IDA director Fred Parola.

Residents have been “victims” of a “less than stellar atmosphere there,” said Daniel Deegan, an attorney for Hempstead Preservation LLC, at a July IDA meeting. “This is going to be a major overhaul that’s going to transform the lives of the people that live there.”

Dan Oppenheimer, chairman of Hempstead’s board of zoning appeals, said at an Aug. 19 IDA meeting that the building has “long been a public safety, quality of life issue for the many hundreds of people who live there.”

Jeffery Daniels, deputy mayor of Hempstead Village, also expressed support for renovations at the meeting.

Hudson Valley Property Group has committed to continuing an existing afterschool program and summer camp in the building, Fayth Vaughn said at the same meeting. She runs the program, called P.E.A.C.E. Afterschool Program Inc.

By Brianne Ledda

brianne.ledda@newsday.com@brianne_ledda

Brianne Ledda covers personal finance and affordability for Newsday. She previously covered Southold and Greenport for The Suffolk Times and is a graduate of Stony Brook University.