New York's Cooperative and Condominium Community
Bendix Anderson in Legal/Financial on April 3, 2020
A small self-managed co-op in the Jackson Heights Historic District, in Queens, faced a quandary. The 15-unit 1920s-vintage building needed a new roof and extensive brick repointing, and the terra-cotta cornice was crumbling. But the co-op didn’t have the cash or the expertise to repair a century-old building. “We’re self-managed,” says Mark Kempson, a board member. “We don’t have a lot of knowledge about historic rehabilitation.”
To the rescue came a little-known source of low-interest loans: the New York Landmarks Conservancy. This nonprofit was created in 1973 to provide technical and financial assistance to owners of historic buildings. In 1982, the Historic Properties Fund became part of the conservancy after the federal government sold the massive Archive Building in Greenwich Village. Money from commercial rents in the building is one source of revenue for the Historic Properties Fund, which has provided more that $29 million in low-interest loans to 260 properties throughout the five boroughs.
To qualify for a loan, a building must be located in one of the city’s 141 Historic Districts or in a neighborhood that has been deemed eligible for listing on the National Register of Historic Places. About 5 percent of the buildings in New York City meet one or both of these criteria. The fund currently has a total of $9 million in assets, and it is able to tailor loans to meet buildings’ unique needs.
The board at the Jackson Heights co-op went hunting for a loan. Frustrated by what commercial banks were offering – “once we saw 6.5 percent interest, we stopped paying attention,” says Kempson, the board member – the co-op turned to the conservancy and secured a 10-year, $300,000 loan at a 5 percent interest rate. At the time, the co-op did not have an underlying mortgage.
With technical assistance from the conservancy, the co-op repointed bricks and replaced the roof but then ran into a snag when it tackled the cornice. The original was made of terra cotta, and though the conservancy favors using original materials when replacing building components, the cost was more than the co-op could bear. So the new cornice was made of cheaper composite stone.
Kempson and his fellow board members are having no trouble living with this compromise. “Taking out a loan with the Landmarks Conservancy was far less expensive than the other options,” he says. “Our board members don’t have a lot of construction and building-maintenance expertise, and prior to this, we were at the mercy of contractors. Not only did the conservancy give us the loan, they gave us architects who are experienced working with landmarked buildings. It was nice working with them.”
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