Community Preservation Corporation, a struggling nonprofit lender for affordable housing, has been rejuvenated with a $250 million capital infusion from Citigroup, the Wall Street Journal reported.
The David Rockefeller-founded CPC has been involved in building or preserving over 145,000 units of housing, the majority of which are affordable rentals. It intends to use the new funds to build and renovate up to 6,000 units. CPC recently closed on its first deal under the new program, issuing a $1.59 million loan to help rehabilitate two distressed Bronx buildings, located at 539-541 East 147th Street. Property owner Workforce Housing Authority will use the loan to invest in major capital improvements including a new roof and heating system.
Experts, such as president of the city Housing Development Corporation Marc Jahr, see CPC’s focus on small, four-story walk-ups and six-story elevator buildings as essential to revitalizing the city. “The fate of a neighborhood resides in the fate of those buildings,” Jahr told the Journal.
CPC made a flurry of bad bets during the condo boom, and had more than $900 million in exposure when the market collapsed. Most notably, the company defaulted on a $125 million loan on the 11-acre Domino Sugar Factory site in Brooklyn it acquired in 2004, and eventually sold to Two Trees Management for $185 million. Two Trees recently unveiled a dramatic redesign of the plan for the Sugar Factory, which was reviewed by The Real Deal.
CPC has spent much of the last five years regrouping from those losses, but Citi’s investment changes things completely, chief executive Rafael Cestero told the Journal. “It allows us to make a turn from being focused on workouts to providing capital for affordable housing in New York,” Cestero said. [WSJ] –Hiten Samtani