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By: Serach Nissim
A new homeless shelter project in Harlem will be the first to tap into a multimillion-dollar loan fund created by Mayor Eric Adams in 2023.
As reported by Crain’s NY, Urban Resource Institute scored a $3.75 million loan for an 84-unit shelter, as announced on Monday by the Department of Homeless Services. The loan is the first awarded from the $15 million fund, announced by Mayor Adams last year, stemming from $5 million in city money and $10 million provided by SeaChange Capital Partners.
The loan fund was created to help nonprofit providers build and own their own shelters, rather than leasing them from private landlords. Officials say building their own space gives providers more control over their buildings’ design and can also save the city money by avoiding costly yearly rent hikes which landlords can impose. There are currently some 40 such projects built or in the works in the city. “Because the provider is involved in design from the very beginning, you’re ending up with a building that is intended for the purpose that it is going to be used for and designed by the people who most know the needs of clients,” Molly Wasow Park, Commissioner of the Department of Social Services, said in an interview.
Per Crain’s, the $3.75 million loan covers pre-development expenses for the 84-unit Harlem shelter, but the city will be paying for 100% of the development costs for URI’s shelter overall. The $273 million government contract for the project, which lasts 33 years until 2056, will pay for all the mortgage payments. As part of the same project, URI will develop another building on a neighboring lot with 54 supportive housing units and 33 affordable apartments. “URI is an expert operator and will bring that staffing and operational expertise to the table,” Park said. “All of those pieces really came together to make this a terrific initial project for the fund.”
Urban Resource Institute is a major Midtown-based provider that already enjoys about $2 billion in city contracts. The group applied for the loan after being awarded a $273 million city contract to build and operate the new shelter, which will serve families with children. The shelter, which will be near the CUNY City College campus in West Harlem, will include full apartments with kitchens, along with on-site services like counseling and child care. Construction is slated to start in November 2024 and it should be complete by the spring of 2026, as per the DHS.
Nathaniel Fields, CEO of URI, said in a statement that the nonprofit is “proud to be part of this transformative collaboration.” “We see this as an opportunity not only to cover acquisition and predevelopment costs but also to foster nonprofit ownership of vital shelters,” Fields said.
Per Crain’s, a lot of nonprofits operate on such thin margins, that it wasn’t enough for the city to help the organizations pay off mortgages—they would need an infusion of capital to get the projects started. The Adams administration therefore started this loan fund, to help with acquisition and pre-development costs. The Adams admin expects that the fund will help start 10 new shelter projects over the next four years, and then continue into the future as borrowers repay their loans.
