COMMUNITY PRESERVATION CORPORATION WILL PROVIDE CONSTRUCTION LOAN

New York City Comptroller William C. Thompson, Jr. today announced an investment by three New York City pension funds to repair the dilapidated exterior of Cathedral Parkway Towers, a 309-unit Mitchell-Lama apartment complex on Cathedral Parkway in Manhattan.

The New York City Employees' Retirement System, the Teachers' Retirement System, and the New York City Police Pension Fund have issued a $35 million commitment to provide the permanent takeout for a construction loan provided by the Community Preservation Corporation (CPC). The CPC loan will be used to replace the outer brick walls of the two-tower complex, which began eroding when a large section toppled into the Towers' garden more than four years ago.

"Today, we have put into motion the beginning stages to rehabilitate Cathedral Towers, maintaining the quality of these affordable homes for its many low-income residents," Comptroller Thompson said. "This is not only a prudent investment for the pension funds, but one that will help generate strength and stability in one of New York City's most historic and evolving neighborhoods."

"The Cathedral Parkway investment is another example of the New York City pension funds using investment dollars to safeguard retirement benefits and spur economic activity and affordable housing in New York City," said Lillian Roberts, Executive Director, District Council 37, AFSCME.

Constructed as part of New York State's Mitchell-Lama Program, Cathedral Parkway Towers consists of one 12-story tower and one 21-story tower, across from the Cathedral Church of St. John the Divine between Amsterdam and Columbus Avenues. The buildings - at 424 W. 110th and 125 W. 109th Streets - were originally constructed in 1975 and owned by Maurice Paprin, managing member of the Cathedral Parkway Associates Partnership.

In 1976, after a long rent strike, Paprin reached an agreement with his tenants, allowing them to co-manage the property through their association, the United Tenants of Cathedral Parkway Towers. The agreement provided them with the option of buying the buildings at any time. In 1997, tenants exercised their right to purchase the building but one year later, just before closing the loan, a piece of the façade plummeted from the building. Tenants called off the closing and refused to buy the property until the problem was solved. Paprin subsequently tried to sell the building to another party but the tenants successfully sued Paprin to obtain their right of ownership.

"The Community Preservation Corporation is very pleased that we are able to help give these tenants get a fresh start by providing the necessary construction financing to purchase the building and correct the long deferred repairs to the property," said Michael Lappin, president and CEO of the CPC. "This is a perfect example of what can be accomplished within New York City's neighborhoods by working cooperatively with the community, the City and the State."

The pension funds collectively will make a $35 million dollar loan to the tenant-owners, who will take out the CPC construction loan and refinance the building's existing mortgages. The loan will be 100% guaranteed by the State of New York Mortgage Agency (SONYMA). As a loan condition, the building will remain in the Mitchell-Lama program for the loan term, preserving these units as affordable Mitchell-Lama apartments.

This investment is part of the pension funds' Economically Targeted Investments (ETI) program, a debt-based investment program targeting New York City's low-, moderate- and middle-income neighborhoods and populations. New housing-related investments made or committed by the pension funds ETI program in fiscal year 2003 totaled close to $220 million.

As of June 30, 2003, the aggregate total of investments and commitments for all of the programs was more than $1.3 billion. These investments, in addition to supporting the renovation, new construction or financing of affordable housing and small retail spaces, helped create childcare facilities and senior citizen centers in low- and moderate-income areas as well as thousands of construction jobs.

ETI investments earn a market rate-of-return commensurate with their risk. Most of the Funds' ETI investments are fully guaranteed by government agencies. As of June 30, 2003, the five-year overall return on the pension funds' targeted investments was 7.34%.

"This investment is a great addition to my Office's Economically Targeted Investments program and one that will benefit the Harlem community for years to come," Thompson said. "Our commitment to Economically Targeted Investments, along with our partnerships with organizations such as CPC and agencies such as SONYMA, are keeping our City's communities safe and affordable places to live."

Public Advocate Betsy Gotbaum, New York City Employees' Retirement System trustee, added: "The pension fund targeted investment in Cathedral Park Towers is a great example of our commitment to protecting retirement dollars for city employees while restoring and preserving the neighborhoods they live in."

Besides Thompson, the trustees on the New York City Employees' Retirement System are: Mayor Michael Bloomberg; Public Advocate Gotbaum; Martha Stark, Chair, New York City Commissioner of Finance; C. Virginia Fields, Borough President of Manhattan; Marty Markowitz, Borough President of Brooklyn; Adolfo Carrion, Borough President of the Bronx; Helen Marshall, Borough President of Queens; James Molinaro, Borough President of Staten Island; Carl Haynes, President, Local 237, International Brotherhood of Teamsters; Lillian Roberts, Executive Director, District Council 37; and, Roger Toussaint, President, Transport Workers Union Local 100.

In addition to Thompson, the New York City Teachers' Retirement System trustees are: Mayor Bloomberg; Commissioner Stark; Kathleen Grimm, Deputy Chancellor, New York City Department of Education; Phillip Berry, Vice President, Colgate Palmolive Inc.; and, Sandra March, Melvyn Aaronson and Mona Romain, all of the United Federation of Teachers.

Besides Thompson, the trustees of the New York City Police Pension Fund are: Mayor Bloomberg; Commissioner Stark; Raymond Kelly, Chair, New York City Police Commissioner; Patrick Lynch, Mubarak Abdul-Jabar, and Scott Williamson, Chair of the Board of Trustees, all of the Police Benevolent Association; Thomas Scotto, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and, John Driscoll, Captains Endowment Association.

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