Charles Bagli has an extensive piece in the New York Times about how the longstanding nonprofit Community Preservation Corporation has run into substantial money problems, and the article illuminates why the developer is now shopping around the Domino development site. Many of the organization’s money woes stem from its for-profit C.P.C. Resources arm, which was established in the ’90s to invest in projects that often involved elements of luxury housing. Here’s the long and short of it, in Bagli’s words: “At the time, Community Preservation defended the ventures, saying it needed to invest in condominiums and other relatively upscale developments in order to strengthen neighborhoods by creating mixed-income communities. But others pointed out that even if that had been the case, the group should not have allocated so much of its capital to such projects. At the peak of the real estate boom in 2007 and 2008, more than half of the $1.5 billion in loans originated by Community Preservation or its for-profit arm were for condos.” The article notes that C.P.C. Resources defaulted on its $125 million Domino loan last month. Meanwhile, here’s a quote from Councilman Brad Lander about how CPC needs to get back to its affordable, nonprofit roots: “C.P.C. was tempted into more speculative lending, which harmed the organization financially and left a big hole in the field of lending for multifamily housing. …Two-thirds of the city’s housing stock are rental units, and that’s why we need C.P.C. to return to its core mission.”
Seeking Real Estate Profits, Nonprofit Group Stumbled [NY Times]
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Wow, talk about big news on the Williamsburg waterfront: The Commercial Observer reports that developers Community Preservation Corporation and the Katan Group have been looking to sell all or parts of the Domino factory development to new buyers. The massive project, which was green-lighted in 2010, was supposed to involve the restoration of the factory in addition to the construction of several high rises. The development was supposed to result in 2,200 residential units, 660 of which would be affordable. The real estate folks the Observer quotes in the article point to several challenges the project faced, including the onus of constructing so much affordable housing and the high cost of renovating the factory itself. What’s surprising about highlighting those issues is that they were certainly obstacles as of a couple years ago, which was when the the project was approved and well after the market crash. Aside from Atlantic Yards, Domino is the biggest (would-be) development planned in Brooklyn.
UPDATE: If you’d like to get caught up on the entire history of the Domino redevelopment efforts, check out our Pinterest board on the subject.