Alafia Project Secures $217M Financing for Third Phase in East New York

• Apex Building Group and L+M Development Partners secured more than $217 million in financing for the third phase of the Alafia affordable housing development in East New York, Brooklyn.
• Phase 3 will deliver 273 affordable apartments across two residential buildings designed to meet Passive House standards.
• Plans include a one-acre public park with a one-mile fitness loop, a children’s play area and residential courtyards.
• The buildings will use a geothermal loop system for energy-efficient heating and cooling.
• The larger Alafia redevelopment is expected to create approximately 2,600 affordable housing units across 27 acres.
• Construction on Phase 3 is expected to be completed in 2029.

What the $217.8 Million Financing Supports

Apex Building Group and L+M Development Partners secured more than $217 million in financing for the third phase of Alafia, a wellness-focused affordable housing community at the 888 Fountain Avenue Spring in Creek section of East New York. The development team is working in partnership with RiseBoro Community Partnership and Services for the Underserved. Phase 3 will include two residential buildings with a combined 273 affordable housing units. Apex will serve as both a developer and the general contractor for the third phase. Construction is expected to be completed in 2029.

What the Affordable Housing Plans Include

All 273 apartments planned for Phase 3 will be affordable. Across the larger Alafia development, 100% of the housing will be affordable, with most units available to households earning no more than 70% of the area median income. The project takes a broader approach to community development by combining affordable housing with health care, recreation, urban agriculture and neighborhood services.

“With Alafia, we are taking a holistic approach to community development by providing some of New York’s most vulnerable residents with access to high-quality, affordable housing and services such as community-based healthcare and an urban farm all in one place,” said Jessica Yoon, managing director at L+M Development Partners.

What the Sustainable Buildings Will Feature

Both residential buildings will be constructed to Passive House standards, which are intended to reduce energy consumption while improving building performance and indoor comfort. The buildings will also use a geothermal loop system for energy-efficient heating and cooling. Additional sustainability funding will come through the New York State Energy Research and Development Authority’s NY-Sun incentive program. Phase 3 will be the first portion of the Alafia development financed using the 25% test structure.

What the New Public Park Will Offer

Phase 3 will include a one-acre publicly accessible park designed to support recreation, wellness and community activity. Plans include a one-mile fitness loop and a children’s play area. Residential courtyards will provide additional outdoor areas within the development. The park will be open to the wider East New York community rather than being limited to residents of the new buildings.

What the Financing Package Includes

New York State Homes and Community Renewal is supporting Phase 3 through several affordable housing financing programs. The federal Low-Income Housing Tax Credit program is expected to generate approximately $97 million in equity, while New York state’s Low-Income Housing Tax Credit program is expected to generate an additional $14 million. The financing package also includes approximately $57 million in tax-exempt bonds and $66 million in state subsidy funding. Additional financing includes construction loans through Redstone Bank, funding from Goldman Sachs Urban Investment Group and NY-Sun incentives from the New York State Energy Research and Development Authority.

What the Larger Alafia Development Will Deliver

Alafia is being developed on a 27-acre site at 888 Fountain Ave., formerly home to the Brooklyn Developmental Center. The property is located near the Gateway Center and the 407-acre Shirley Chisholm State Park. Once all phases are completed, the redevelopment is expected to include approximately 2,600 affordable housing units. Plans also call for 50,000 square feet of commercial and community facility space, including a new One Brooklyn Health medical facility and a senior center. The development will provide more than 20,000 square feet of open space and urban agriculture areas, along with several thousand square feet of neighborhood retail space.

What Alafia Means for East New York

Alafia is part of New York state’s $1.4 billion Vital Brooklyn Initiative, a community development program focused on addressing social, economic and health disparities through affordable housing and integrated community services. The project is designed to bring housing, health care, senior services, retail, recreation, urban agriculture and sustainable infrastructure together within one large mixed-use community.

“Alafia demonstrates how strategic public-private partnerships can transform underutilized sites into vibrant neighborhoods that expand opportunity for New Yorkers,” said Hope Knight, president, CEO and commissioner of Empire State Development.

What Comes Next for Phase 3

With financing secured, the development team can move forward with construction of the two affordable housing buildings and the one-acre public park. Phase 3 is expected to be completed in 2029. Apex will serve as the general contractor, while an architect for the two residential buildings was not identified.