Hardscrabble Apartments in Farmingdale to be sold, renovated but stay affordable due to tax breaks
Hardscrabble Apartments at 400 Main St. in Farmingdale rents out 80 units for low-income seniors. Credit: Howard Simmons
An apartment complex in Farmingdale will remain exclusively for low-income seniors for another 20 years because of tax breaks from Nassau County.
The new owner of Hardscrabble Apartments was awarded tax incentives last week by the county’s Industrial Development Agency. The facility, at 400 Main St., has 80 units.
The IDA assistance consists of a sales-tax exemption of up to $115,130 on the purchase of construction materials and equipment, up to $155,800 off the mortgage-recording tax, and 20 years of property tax savings.
The latter calls for K&R Preservation, a for-profit developer, to pay about 7% of its gross income from residents’ rent as a payment in lieu of taxes in the first year, followed by increases in the next 19 years, according to an analysis from Grow America, an economic development nonprofit based in Manhattan.
K&R's PILOT payments would be less than full taxes, but more than what the public school district and other taxing jurisdictions have received for decades because Hardscrabble was constructed and owned by the nonprofit Farmingdale Housing Development Fund Co., which is tax-exempt, according to the analysis, which was paid for by the IDA.
William Rockensies, the agency’s board chairman, said in an interview, “If not for the IDA, [K&R] wouldn’t be able to purchase the property, complete the rehabilitation and have the property remain 100% affordable for seniors. … We need more affordable housing on Long Island and with this project we are also helping seniors in need.”
The IDA board voted unanimously to approve the tax breaks at its meeting last week.
Brian Raddock, co-founder of K&R, told the board that his company plans to “rehab the facility, [including] new kitchens, bathrooms, site work … and extending the affordability at Hardscrabble for the next 20 years.”
The project is valued at $27 million with 75% going toward the purchase price and nearly $4 million being spent on renovations, or nearly $48,000 per unit, according to the application for IDA assistance.
K&R will renew the federal contract that designates the property as Section 8 housing for low-income seniors, Raddock said.
He founded K&R in 2017 with the late Francine Kellman to rehabilitate public housing projects while keeping rents affordable. The company has made improvements to nearly 5,000 apartments in New York and New Jersey.
The Farmingdale apartment complex was developed by four area churches and a synagogue in the 1980s to provide housing for low-income people who are 62 and older, said Stephen Kressel, longtime president and treasurer of the housing development fund.
Hardscrabble is located across the street from one development fund member, Farmingdale United Methodist Church, and around the corner from another, St. Kilian Roman Catholic Church. The other members are St. Luke’s Lutheran Church, St. Thomas Episcopal Church and Congregation Beth Tikvah in Wantagh.
"Hardscrabble is a real example of ecumenism. ... It's been a joy to work on," Kressel said in an interview on Monday. "The place looks nice, but it needs a redo, it could be a lot nicer in terms of the physical plant."
He said the 15-member board of the development fund began exploring sale options for Hardscrabble about a decade ago. The board voted unanimously to sell to K&R under the condition that the complex continue to accept Section 8 vouchers and charge affordable rents.
Residents "will be undisturbed" by the sale because K&R is "highly competent and has good intentions" said Kressel, 86, an attorney and member of Congregation Beth Tikvah.
He added that the five religious institutions will use the sale proceeds for “charitable purposes.”
The sale must be approved by the state Attorney General's Office and the federal Department of Housing and Urban Development. Kressel said he hopes the transaction will be completed this month, though the timing is uncertain because of the federal government shutdown.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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