McConnell Valdés represents the investor in the partnership that will acquire and modernize 33 public housing projects across Puerto Rico.
The Puerto Rico Public Housing Administration (“PRPHA”), in collaboration with Department of Housing of the Commonwealth of Puerto Rico (“DOH”), has initiated an effort to rehabilitate and modernize a sizeable amount of Puerto Rico’s public housing projects. Rehabilitation and modernization efforts will be financed through a mixed-finance program approved by the U.S. Housing and Urban Development Agency (“HUD”) under the provisions of U.S. Housing Act of 1937 and applicable regulations.
In order to establish the necessary structure for the mixed-finance program, the PRPHA transferred the ownership of 33 housing projects to the DOH. The DOH subsequently transferred the public housing projects to a Puerto Rico limited liability company which will undertake the rehabilitation and modernization work of the projects with the approval of HUD, but which work will be directed and implemented by the DOH, as general partner of the partnership, and through an agency agreement by the PRPHA. The transfer of the public housing projects to the limited liability company was effected by way of constitution of surface rights over the land of the transferred projects and conveyance of the improvements erected thereat. The sole member of the limited liability company will be a Puerto Rico special civil partnership, the general partner of which is the DOH and the limited partner is a joint venture of stateside investors, which will be applicants and beneficiaries of low income housing tax credits under Section 42 of the U.S. Internal Revenue Code. The tax credit portion of this transaction represents the largest single equity investment in the 22-year history of the Low-Income Housing Tax Credit Program.
In this deal, which was characterized by HUD as of historic financial dimensions, McConnell Valdés represented the investor in the partnership that will acquire and modernize 33 public housing projects across Puerto Rico. This public-private partnership arrangement involved real estate, land use, financing, tax credits, partnership and federal and state constitutional and other legal issues that were negotiated among the parties.
