Newburgh, N.Y - To help lead a revival in this old Hudson River town, Tricia Haggerty is working to restore the historic Ritz Theater as a part of her mixed-use supportive housing project here.

Haggerty is the executive director of Safe Harbors of the Hudson. This summer, she will begin the rehabilitation of the Cornerstone Residences, her first affordable housing project. The Cornerstone will eventually mix 116 supportive housing units with a 500-seat theater. The project will also include 12 live-work apartments for low-income artists with generous gallery and art studio space, three rentable commercial spaces totaling over 10,000 square feet, and the Green Room, a huge, restored grand dining room with a professional kitchen that may eventually be rented out to the community.

The dizzying array of uses was dictated in part by the site. The Cornerstone is a package of three historic structures, though from the street it appears to be a single, long brick building. It's bigger than it looks, totaling 110,000 square feet and mixing a complicated cocktail of uses.

Lucille Ball and Frank Sinatra both performed at the old Ritz Theater, the building to the east, before the grand old house was chopped into four smaller movie theaters that went dark over 30 years ago. In the late 1990s, the four theaters were freshly renovated into a mainstream cinema that closed again after only six months.

When Haggerty's group took ownership of the Cornerstone in late 2002, many apartments in the 92-room Hotel Newburgh, the middle building, had no heat and were infested with rats and roaches.

"It's a colossal building," said Michael Skrebutenas, director of replication for Common Ground Community, a New York based supportive housing organization that is acting as co-developer.

Common Ground was founded and is headed by Tricia Haggerty's sister-in-law, Rosanne Haggerty, who advised Tricia Haggerty to trust in her own instincts even though many developers might have shied away from a renovation project with so many disparate pieces.

In fact, when Safe Harbors purchased the Cornerstone, Tricia Haggerty's consultant at the time, and expert in low-income housing tax credits (LIHTC's), advised her to tear out the remnants of the Ritz Theater, making room for up to 40 new apartments.

After all, the planned restoration of the theater would caost and additional $4 million on top of the $19.3 million the rest of the project would cost. Once Haggert finds the financing for the $4 million renovation and the work is finally complete, it's still not clear that downtown Newburgh can support a 500-seat theater.

But Haggerty is betting on the future. She hopes her project will start a revival in downtown Newburgh, and to do that, the development needs to reach out to the surrounding community.

Last December, the lights went up on "The Woodcutter's Christmas," the first production at the Corderstone. The performance gathered a respectable audience of 75 paying spectators in one of the project's four existing movie theaters. Most of the audience came from the neighborhood.

"Just housing is not what this community needs," Haggerty said. "If I was given the opportunity to do a straight-up housing deal, I wouldn't have done it.

However, the new floor plan for the cornerstone will turn a great deal of former commercial space on the second and third floors of the former Sears Building into new apartments.

To finance the reconstruction of the Cornerstone, the project needed what Skrebutenas calls "a critical mass" of housing units. The LIHTC program will finance a limited amount of commjnity space at a project. A development where more than a third of the square footage is not residential becomes increasingly difficult to subsidize.

The $19.3 million project received an allocation of LIHTC's estimated to raise $12 million in tax credit equity once they're sold to a syndicator. At press time, five large syndicators were bidding on the credits. The Cornerstone will also receive federal historic restoration tax credits worth $2.6 million.

Grants included funds from the state Homeless Housing Assistance Program and the state Office of Mental Health (OMH). With no debt, Safe Harbors will not have to depend on operating income from retail tenants in its two now-vacant storefronts. Haggerty is currently working to lure temporary tenants into the spaces because reconstruction will disrupt the shops in about a year.

A nearby satellite campus of Orange County College, plus a new office of the Department of Motor Vehicles, Newburgh's City Hall and the Newburgh Library, should all offer some foot traffic to retail tenants, now that criminal activity has stopped on the sidewalk in front of the project.
The mix of uses and incomes at the Cornerstone will help keep it from being labeled as a dangerous housing project.

Though all of the units will be reserved for tenants earning less than 60% of the area median income (AMI), the 12 artist apartments and extensive artistic space should be enough to shift the identity of the building.

Very low income tenants earning less than 30% of AMI will live in most of the 116 supportive housing units. Of those, 32 units will receive project-based Sec. 8 rental subsidies. Another 39 units will probably receive project-based rental subsidies from the OMH. The remaining apartments will house a mix of very low income tenants with Sec. 8 vouchers supplied by the local housing authority and low-income tenants paying higher LIHTC rents.

The 12 live-work apartments will average about 640 square feet, while the supportive housing units will range from 285 to 314 square feet. Services such as medical and drug treatment will be supplied to residents through Independent Living Center, Inc., which has an office at the Cornerstone.