In the Real Deal’s February 1, 2022 interview – “The Closing” — with my successor at the Community Preservation Corporation (CPC), a link was made to an ill-informed 2012 New York Times article critical of CPC, but failed to note my response to it as found in the Times online edition, and further elaborated in my article in Crain’s. The condo loans mentioned in the interview were originated as part of an ongoing effort to create workforce housing at a time of severe shortages of moderately priced housing. They, like every investment including Parkchester and the purchase of the Domino Sugar site, were approved by CPC’s board and its investment committees. The board and investment committees were composed of representatives from CPC’s then sponsoring banks and insurance companies.
Like many developments that started construction during the pre-2008 period, several condo construction loans fell prey to the recession. It was the first serious defaults that the company experienced since its founding in 1974. The finger pointing and gratuitous questioning of motives which ensued, obscured the incredible record CPC had amassed during its then 37-year history, 31 years of which I served as CEO. That record provided the financial ballast to absorb the losses CPC experienced, about $60 million, and get through that difficult recessionary period.
More recently, CPC’s sale of its one-third interest in Parkchester, a legacy project involving the seven-year (1998-2005) restoration of the 12,271-unit housing complex, netted a profit of over $150 million. This infusion of capital provides a spring board for the company to expand its efforts both in NYC – where much needs to be done –and in its upstate New York and regional lending areas.
Let’s provide a proper perspective on CPC’s history. From1974 through 2011, CPC worked with communities in the City and State of New York and some surrounding areas to meet their varied affordable housing needs. During that period, over $7 billion was invested to restore and build over 145,000 affordable homes, including over 93,000 in New York City. Like many financial institutions at that time, it got rocked by the recession. However, CPC’s accumulated resources provided a solid foundation for the company to recover and carry its mission forward.
Michael Lappin, former CEO of The Community Preservation Corporation (1980-2011), and currently head of M. Lappin & Associates, a provider of advisory services for affordable housing