Newark, NJ—March 5, 2020— Mayor Ras J. Baraka and Acting Governor Sheila Oliver joined federal, state and city officials, community leaders, and property owner Omni America, LLC to announce the completion of a $172 million rehabilitation of the Garden and Spruce Spires affordable housing communities in Newark. The rehabilitation, which was funded in large part by the State, addressed all past building and fire code violations and has dramatically improved the quality of life for the more than 650 households who live in the housing complexes.
Garden Spires, which was built in 1963 on the site of the old Newark Academy, consists of two 20-story buildings located on First Street adjacent to Route 280 that provide 544 apartments for families. NJHMFA contributed $59.4 million in financing from its Conduit Bond program to the $135.3 million rehabilitation project for Garden Spires. In addition to the improvements already noted, work included repaving the parking lot, repairing sidewalks and walkways, adding community rooms and laundry facilities, and upgrading the security alarm system, including the installation of about 400 DVR surveillance cameras.
Spruce Spires, which was built in 1920, has 112 apartments spread across four four-story buildings and one five-story building located on Spruce Street and Martin Luther King Boulevard. NJHMFA awarded $16.3 million in financing from the Conduit Bond program for the $37.3 million rehabilitation project for Spruce Spires. Work also included the repair of sidewalks and walkways, upgrades to the security alarm system, and the installation of approximately 100 DVR surveillance cameras.
“For the last two years, this administration has driven efforts and worked diligently with public and private partners to rehabilitate the Garden Spires and Spruce Spires apartment complexes, which had become nearly uninhabitable to their tenants, a public health hazard to our community, and a serious public safety threat,” said Mayor Baraka. “Today we can report to our city in general and to the 650 households of these buildings in particular, that after 18 months, the properties have been restored.”
“Today’s ribbon cutting of the fully renovated Garden and Spruce Spires shows what collaboration among government agencies and the private sector can accomplish when everyone is working toward a common purpose. Looking at these revitalized buildings today, I am reminded of a time during my childhood when people of all occupations were clamoring to get into apartments here,” said Acting Governor Oliver, who serves as Commissioner of the New Jersey Department of Community Affairs (DCA). “These improvements do more than abate safety violations and property decay; they show that every person is deserving of human dignity, which includes living in clean and decent housing they can be proud to call home.”
State funds provided by the New Jersey Housing and Mortgage Finance Agency (NJHMFA) and New Jersey Economic Development Authority (NJEDA) to the property owner were used for extensive interior and exterior renovations. These included new roofs, flooring and lighting; new kitchen cabinets, appliances and fixtures; new bathroom vanities, sinks, and bath enclosures; and new building mechanical systems, including hot water heaters, boilers and electrical panels, as well as a cogeneration system at Garden Spires. A 30-year tax abatement by the City of Newark and the City’s acceptance of lowered PILOT payments contributed to making the project viable.
No tenants were displaced during the rehabilitation project, which began in the fall of 2018 and took 18 months to complete. Renovations took about two to three weeks per apartment unit with residents able to return to their homes at the end of each day.
“I applaud all the partners for their work in seeing this critical project through to completion," said U.S. Senator Cory A. Booker in a statement. “During my days as a housing advocate in buildings like Garden Spires and later as mayor of Newark, I saw firsthand the challenges families face in trying to satisfy the fundamental human right of access to safe, affordable, and adequate housing. We must all be committed to ensuring each and every Newark resident has the dignity of safe and secure living conditions, and the completion of this project marks a step forward in fulfilling that promise.”
Both housing complexes had amassed more than 2,700 state fire and building code violations cited by DCA. The City of Newark helped change the future of the two housing communities by conducting unannounced building inspections in 2015, citing the previous owner for violations, and suing the previous owner when they failed to make repairs. The City also led the effort to find a developer willing to completely renovate the properties and preserve them as affordable housing.
In 2018, the U.S. Department of Housing and Urban Development (HUD) took action against the previous owner of the housing complexes, declaring them an absentee landlord and requiring them to pay $800,000 in civil penalties for failing to provide decent, safe, and sanitary housing conditions to residents. HUD provides project-based Section 8 rental assistance for 350 units at Garden Spires and 112 units at Spruce Spires.
“Last year, I declared war on New Jersey slumlords making it crystal clear that they have a legal and moral obligation to provide decent and safe housing to the families we serve and that there will be stiff penalties to pay to those who fail to do so. What I saw at Garden and Spruce Spires is what helped HUD prompt the national change to HUD’s REAC scoring system. Today, we have finally come full circle to celebrate the completion of this incredible rehabilitation for the long-suffering residents of Garden and Spruce Spires,” said Lynne Patton, HUD Regional Administrator for New York and New Jersey.
In addition to financing from the Conduit Bond program, Omni America, LLC also received from NJHMFA 4% Low Income Housing Tax Credits, which provided the Garden and Spruce Spires projects with $49.1 million in private equity.
“With the new ownership of Omni America and a substantial rehabilitation of all buildings, today we celebrate a new beginning for residents," said NJHMFA Executive Director Charles A. Richman. "Thank you to Omni for taking this project on. These renovations will continue to preserve affordable housing and provide stable homes, enabling residents to live without fear of their living conditions or being priced out of their neighborhood."
Omni America, LLC was also awarded $43 million in State Economic Redevelopment and Growth (ERG) Program tax credits by the NJEDA for the rehabilitation projects.
“Governor Murphy’s vision for more equitable, inclusive economic development includes targeted investment in our cities. The improvements to the Garden and Spruce Spires facilities illustrate how this approach can impact the well-being and future of countless families,” said NJEDA CEO Tim Sullivan. “We thank Acting Governor Sheila Oliver for her leadership and appreciate DCA’s and NJHMFA’s crucial roles in bringing this project to fruition.”
Omni America, LLC owns and manages more than 14,000 units of affordable housing in eleven states, including New Jersey, New York, Massachusetts, Rhode Island, Wyoming, and throughout the Southeast. In addition to providing affordable housing, the company, which was co-founded and is co-managed by former Major League Baseball All-Star Mo Vaughn, partners with local community and neighborhood organizations to offer after school programs, skills training seminars and adult education classes for residents of their housing complexes.
“After 18 months of hard work by the Omni team, we are pleased to not only improve the physical conditions of these buildings, but also improve the quality of life for our residents at Garden Spires and Spruce Spires Apartments,” said Eugene Schneur, Managing Partner of Omni America LLC. “We want to thank all of the government and financial organizations that worked together to make this deal possible.”