The 12,271 units at the Parkchester are fully occupied for what may be the first time in decades.
Bronx, N.Y. – A young family can now buy a two-bedroom apartment at the Parkchester for about $150,000. That’s a big change since just 1998, when units sold for as little as $25,000, if they sold at all.
Back then, with 171 dilapidated brick buildings spread over 129 acres, the Parkchester may have been the largest failed condominium conversion ever. Two decades after Harry B. Helmsley and partners bought the project, many lenders refused to make home mortgages at the complex and only about half of the 12,271 condos had sold.
By then, holding thousands of unsold condos was costing Helmsley $2 million to $3 million a year. And the complex was rotting away. On an average day, residents called in more than 60 plumbing breaks, according to Michael Lappin, president and CEO of the nonprofit Community Preservation Corp. (CPC), based in New York City.
CPC created the Parkchester Preservation Co., LLC, which along with several partners bought Helmsley’s 6,362 unsold condos for just $4.5 million in July 1998. CPC planned to fix the windows, wiring and plumbing throughout the complex. The deal also included a 500,000-square-foot shopping center in the middle of the complex with a Macy’s department store.
But the repairs needed the approval of the Parkchester’s two condominium boards and the owners, and some didn’t want the Parkchester to change.
The fight to fix up the Parkchester rapidly became a fight for the trust of the community. CPC reached out to local journalists and religious leaders, from a Baptist church to a local mosque. Lappin even addressed congregations himself from the pulpit.
“They proved themselves,” remembered Harry L. Brown, a retired postmaster who has sat on the Parkchester North Condominium Board since 1975 and is now board president. He supported the renovation even after opponents held an angry demonstration outside his apartment door and flipped over tables at board meetings.
After years of argument, both condominium boards voted for the renovation. The total cost of the project, including soft costs and overruns, ran up to $260 million, or about $21,000 per unit to replace windows, wiring and plumbing, when it was finished last summer. Workers started fixing up the southern part of the complex in December 1999. Work on the northern part began in 2002.
The renovation received little government subsidy, just a real estate tax abatement and a $4.6 million grant for energy-efficient windows. The partnership invested $250 million in the project, financed with a $220 million package of construction financing provided by CPC’s member banks and $30 million in partnership equity. The partnership’s apartments are now fully rented for the first time in decades.
“This is the crossroads of the Bronx,” Brown said. “Everybody wants to get in here.”