Renovation and revitalization of the 12,271-unit Parkchester condominium, a visionary ten year undertaking, is CPC Resources’ greatest effort to date.
Built between 1939 and 1942 by Met Life as middle-income rental housing, Parkchester was the largest privately built planned community in America. A subsequent owner converted it into two separate condominiums. By 1995, the complex was old and deteriorated: its plumbing system suffered over 60 pipe breaks per day; the original casement windows were warped and drafty; the original 15 amp electrical service couldn’t support air conditioners or modern appliances. Worse, the condominiums were unable to borrow to make much-needed repairs. Individual unit values had plummeted, and the community’s retail area was lagging. CPC Resources was approached to help.
With its partners, affiliates of real estate developers Morton Olshan and Jeremiah O’Connor, CPC Resources formed a joint venture, Parkchester Preservation Company (PPC), to acquire 6,361 unsold residential units, 500,000 square feet of commercial space and five parking garages. These assets became collateral for the condominiums to borrow funds for the necessary repairs and improvements. Rehabilitation of the Parkchester North and South Condominiums cost more than $250 million (including equity contributions from PPC) and included: * Installation of more than 65,000 new windows. * New, high capacity wiring and copper piping in all 12,271 apartments in 171 buildings. * A complete revitalization of the commercial space, including a renovation program and a long-term commitment from anchor tenant Macy’s, and active marketing to attract more national retailers. * The reentry of secondary mortgage markets, allowing lenders to make purchase money and refinancing loans available to Parkchester homeowners once again.
Financing for the renovation was provided by CPC and several of its member banks, including Bank of America (formerly Fleet Bank), Emigrant Savings Bank, J.P. Morgan Chase (formerly JP Morgan Bank), Citibank, Washington Mutual (formerly The Dime Savings Bank of New York), Apple Bank for Savings, Astoria Federal Savings and Loan Association, HSBC, Independence Community Bank, and the Amalgamated Bank of New York. Permanent loan financing was provided by Freddie Mac, with mortgage insurance provided by SONYMA.A $4.7 million grant from the New York State Energy Research and Development Agency (NYSERDA) enabled energy conservation improvements in the North Condominium, including upgrades to the heating system, hallway and stairwell lighting replacement and energy efficient refrigerators.The renovation’s cost was borne by unit owners through increases in common charges. Real estate tax abatements, granted through special New York City and State legislation, partially offset these increased costs. As a result unit owners pay no real estate taxes for 15 years or longer. In addition, PPC subsidizes low-income senior and disabled residents in both condominiums.
Today, Parkchester is thriving. Both condominiums are seeing substantial increases in apartment values and in overall quality of life. Prices have increased from $22,000 to $85,000 for one-bedroom units and from $35,000 to $135,000 for two-bedroom units. A new community center with a health center and a swimming pool is to begin construction in 2006. A new wave of moderate and middle-income homeowners is once again finding Parkchester an appealing and affordable place to live. It is a success story that defines CPCR’s mission.