Crain's New York Business
March 9, 2012
Community Preservation Corp. announced late Thursday that it will be able to help finance the creation or preservation of nearly 5,000 affordable housing units across New York state as a result of having received an extension of an existing credit facility, which will allow up to $70 million in financing.
Additionally, the nonprofit that finances and develops residential projects throughout the New York area announced the first New York City project that will benefit from the facility. It is an 81-unit, four-building rental complex in the Morrisania section of the Bronx.
The new $385 million credit facility has a two-year term and involved the approval of 72 different banks and a six month negotiation process, according to Sadie McKeown, chief operating officer of CPC. It has been the main vehicle behind CPC's work.
“It was a huge undertaking, and we are very happy with the result,” Ms. McKeown said.
In a statement, her boss more than agreed. “This credit facility will provide a reliable source of much needed capital and liquidity for this crucially important segment of the market,” said CPC CEO Rafael Cestero, the former city Department of Housing Preservation and Development commissioner, who took the helm of CPC earlier this year.
Using the facility, CPC will provide a construction loan and pension fund-backed permanent loan for close to $2.8 million to the Morrisania Preservation Corp., owner of four rental buildings located at 754 E. 161st St. and Longfellow Avenue in the Bronx. With an additional loan of $1.3 million from the city's Department of Housing Preservation and Development, the owner will renovate the property, which fell into disrepair from lack of funds to maintain the buildings.
Tenants will not be displaced during construction, and the CPC loan will also be used to pay off water bill liens and debt on the properties. Morrisania Preservation has owned the complex since the early 1990s.
"I am gratified for the pivotal assistance of CPC and the City for helping us translate our plans into reality and for the tremendous impact on our tenants who also stand to benefit from these renovations,” said Claudia Nisbett, executive director of Morrisania Preservation Corp., in a statement.
Founded in 1974, CPC has invested nearly $8 billion in over 144,000 units of housing since its inception. In its biggest project to date, CPC plans to redevelop the former Domino sugar factory site on the Williamsburg, Brooklyn, waterfront into a mixed-use development with affordable housing. In January, Mr. Cestero said the firm was in the process of planning for that huge project.