As noted in this morning’s Lower East Side Links, Goldman Sachs is now making an unprecedented investment in Essex Crossing. The Real Deal has new details today on commitments from the bank’s Urban Investment Group for nearly $500 million in the Lower East Side development project.
Back in December of 2014, the firm came forward with $181 million for the first phase of construction. Now underway on four of nine development sites, the initial phase includes 556 apartments, a new Essex Street Market, a 14-screen movie theater and a medical center from NYU Langone. Goldman Sachs also contributed $19 million for the planning of phases two and three. Now, according to the Real Deal, it’s ready to provide the development team with another $200 million in equity.
More from the story:
…by the time the project is done, Goldman’s total commitment is likely to be close to $500 million, according to Margaret Anadu, one of the group’s managing directors. “You don’t typically see investments from an impact perspective made at this scale,” Anadu told The Real Deal. “Even for our program to invest this much is very unusual.”
The project in the former Seward Park urban renewal area is a joint venture of three firms: BFC Partners, L+M Development Partners and Taconic Investment Partners. The industry publication notes that their stake in Essex Crossing is now dwarfed by that of Goldman Sachs:
Goldman now has an “unprecedented” 85 percent equity stake in the project, Anadu said, with BFC, L+M and Taconic maintaining just 5 percent apiece. About $11.7 million of that equity, or 6.5 percent, was generated through the deployment of New Market Tax Credits, a federal initiative to promote investment in low-income communities.
The blend of affordable and market rate housing, along with commercial development, was attractive to the firm. “It’s like everything that we’ve invested in over the years,” said Anadu, “thoughtfully programmed into one project.”
Other banks involved in backing Essex Crossing include Wells Fargo and Citibank.