ART - FINANCING STRUCTURE PROVIDES SAVINGS FOR NEW YORK CITY AGENCY CONSOLIDATION 2012

The document discusses a financing structure used by the Human Resources Administration (HRA) of New York City to save money and complete a complex transaction for a 400,000-square-foot facility in downtown Brooklyn. The project involved consolidating three locations into one and downsizing office space. The financing structure involved arranging a non-recourse tenant improvements loan for the building owner, backed by a portion of the rent payable by HRA. The loan was privately placed with institutional investors and had a loan rate just over 4 percent. The savings from this financing structure were passed on to HRA in a lower rental rate. The document also highlights the benefits of converting capital expenditures into reimbursable administrative expenses for federal and state reimbursement purposes. The document suggests that this financing structure can be widely applicable for all state and local governments.