Hundreds Of Section 8 Apartments Preserved In Newark’s South Ward

NEWARK, NJ — Hundreds of Section 8 housing units at an apartment complex in the South Ward of Newark are safe for another 20 years, officials announced Tuesday.

A $20 million rehab effort – including new kitchens, bathrooms and heating/air conditioning – is planned for Zion Towers on Elizabeth Avenue, which has 268 units of Section 8 housing, according to L+M Development Partners and Prudential Financial Inc.

The New Jersey Department of Community Affairs (DCA) was ready to end its Section 8 contract with Zion Towers until L+M and Prudential bought the apartment building in 2017 and spent more than $7 million to make improvements, preserving its Section 8 status with the state.

Fixes so far have included repairing and replacing heat and hot water boilers, repairing showers to eliminate building-wide leaks and installing a new security camera system.

The upcoming $20 million renovation will provide every apartment with upgrades including new kitchens (cabinets, appliances, lighting and flooring), new bathrooms (fixtures, floors, lighting and vanities), lobby and community room renovations, roof repairs and replacement, facade repair to eliminate leaks, new windows, elevator modernization, and an overhaul of the heating and air conditioning system (new cooling towers, refurbished chillers and a replacement fan coil in each apartment).

L+M and Prudential have also partnered with Collaborative Support Programs of New Jersey to provide supportive services and outreach for 12 one-bedroom units that are targeted for mental health special needs residents. These apartments are funded by the Sandy loan, developers said.

Zion Towers is also under a New Jersey Housing and Mortgage Financing Agency (NJHMFA) regulatory agreement guaranteeing affordability for the next 30 years.

Newark Mayor Ras Baraka said the rehab of Zion Towers was an example of “equitable growth” in the city.

“Keeping housing affordable for Newark residents through preservation, new construction and rent limitations is one of the most important priorities of my administration,” Baraka said.

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“I would like to thank L+M for taking over a building which has had decades of mismanagement by prior owners,” said Newark Counciman John Sharpe James. “Rather than displacing South Ward residents from a building with affordable Section 8 apartments, as was done at vacant Carmel Towers, L+M will take on the heavy task of renovating every unit. This will improve the quality of life for residents living in these greatly needed affordable housing units.”

Here’s where the money to rehab the property is coming from, according to developers:

“Refinancing for the repairs to Zion Towers is provided by several sources, including loans from the NJHMFA and Citi Community Capital; the award of 4% Low Income Housing Tax Credits from NJHMFA and tax credit equity from Wells Fargo Bank, NA; subsidy loans from NJHMFA through the Sandy Special Needs Housing Fund and Money Follows the Person Housing Partnership Program, as well as from Citi Community Capital; and a payment in lieu of taxes (PILOT) agreement with the City of Newark.”

The Zion Towers agreement comes on the heels of L+M and Prudential’s similar acquisition and preservation of the Georgia King Village in Newark, which also received financing from the NJHMFA.

“Our work in the outer wards is focused not just on revitalizing distressed properties but also ensuring that those living there can stay there,” said Jeffrey Moelis, managing director of preservation at L+M Development Partners.

“Just as it's been at Georgia King Village, the key to a successful turnaround at Zion Towers will be continuing the open communication and close working relationship with our residents as essential repairs continue,” Moelis said.

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