BY DENNIS LYNCH | The City Council has approved a resolution to extend existing tax abatements at Penn South until the year 2052 — a move that secures the most vital component to keep the 10-building, 2,820-unit co-op complex affordable for the first half of the 21st century.
The Council’s Wed., Feb. 1 approval of the tax abatements scheme comes two weeks after the federal government approved a deal to refinance Penn South’s mortgage and lock in a low interest rate until the same year. The tax abatement was required to complete that deal, which should come together in the next few months, according to Penn South General Manager Brendan Keany.
“Everything’s fallen very nicely into place,” Keany said. “We expect we will be concluding the commitment very shortly and closing on the loan in either March or April.”
Keany added that Penn South “is gratified once again, for the fourth time, to have extended our contract with the city of New York for 2052 and to continue our original mission providing affordable housing for several generations of New Yorkers.”
The federal deal will save residents an estimated $3 million per year, which Keany said would go towards maintenance and capital improvements at the 15-building complex. Without it, residents would have to foot those bills and pay for any interest rate increases over the years.
The city has granted Penn South tax abatements since it first opened in 1962, allowing it to remain affordable as property values around it have skyrocketed in an increasingly wealthy neighborhood. Protecting Penn South’s affordability is crucial for Chelsea and the city itself, said Councilmember Corey Johnson in response to the Council’s approval of the tax abatements.
“This vote,” Johnson told Chelsea Now, “was about ensuring that the people who built our community can stay here and retire here in dignity. Penn South is the heart of Chelsea. It’s a beacon of affordability in one of the most expensive cities in the world. Extending affordability is going to benefit thousands of families over decades to come.”
Some worried the federal deal, more a great opportunity for Penn South to save money rather than a necessity, would fall apart once President Donald Trump’s pick for the Secretary of Housing and Urban Development, Ben Carson, took office. Penn South started the process for that deal in late 2015 and it was delayed when it hit some road bumps this past fall. Senator Chuck Schumer helped expedite the deal in the last days of Barack Obama’s presidency.