Abyssinian Development Corp. will continue its push to sell buildings and curtail social services in the face of the company’s daunting financial problems.
The company, the development arm of the Abyssinian Baptist Church, has already sold off its Pathmark and Renaissance Ballroom properties, along with about a quarter of its affordable housing. It’s also laid off its entire nonprofit staff.
Rev. Calvin Butts, who leads both the developer and the church, acknowledged his management failings and vowed to dig the company out in the future, telling Crain’s, “I take it all. When it rains, the head gets wet first.”
Abyssinian is believed to be the third largest landlord in Harlem, steadily adding properties since the late 1980s. The company eventually owned $172 million in properties and assets, and was responsible for more than $600 million in residential and commercial development in Harlem.
The firm’s financial problems began after the 2008 financial crisis. The revenues that Abyssinian’s affordable properties generated wasn’t enough to cover their costs, Butts told Crain’s. The developer began selling properties and mortgaging others, but the underlying cash flow problem persisted. The company’s debt has now risen to over $160 million.
Last year, Abyssinian sold the Renaissance Ballroom at 351 Adam Clayton Powell Jr. Boulevard in Harlem for $15 million to Meredith Marshall’s BRP Development Corp.
Butts is also tied up in litigation related to the $39 million sale of a Pathmark supermarket at 142-96 East 125th Street to Gary Barnett’s Extell Development. It’s partner in that property, the East Harlem Triangle, sued Abyssinian for half the value of the sale, claiming the developer didn’t consult it. Barnett is planning luxury condos at the site.
In September, the de Blasio administration cut off $3.1 million in the developer’s contracts, and this month the attorney general’s office launched an audit.
Abyssinian’s remaining portfolio is valued at around $155 million, having risen about 40 percent in the last four years, Michael Vargas, co-founder of Vanderbilt Appraisal Co. Butts plans on selling the vacant Ennis Francis Houses. [Crain’s] – Ariel Stulberg