Press | April 27, 2008

A Catalyst for a Faded Village

By Elsa Brenner

New York Times

 

Like many other downtown areas forsaken by mall-seeking shoppers over the years, Main Street in Spring Valley remains a stretch of shabby storefronts, empty lots and “space for rent” signs. Save for the presence of two new excavation sites and earth-moving equipment, the six-block-long area in the village center looks decidedly on the decline.

 

The new construction sites, developments by CPC Resources (the for-profit subsidiary of the Community Preservation Corporation, a not-for-profit mortgage lender), represent one of the first efforts in more than five decades to pump vitality into a once-flourishing section of this Rockland County village just north of the New Jersey border.

 

As it has done elsewhere, CPC Resources is hoping to act as an economic catalyst. “This is a village that needs a lot of help,” said Thomas P. McGrath, a senior vice president for CPC Resources in Hawthorne. “It’s had a very difficult time attracting investment, so for us, it’s a great opportunity.”

 

The group is developing the sites with the Rockland Housing Action Coalition, an affordable-housing agency.

 

The first of the two projects, budgeted at $18 million, envisions 53 below-market-rate rental apartments in a four-story building with 11,000 square feet of commercial space on the first floor. The 48 one-bedroom and 5 two-bedroom apartments will be offered to people 55 and older who earn 50 percent or less of Rockland’s median income, which is $76,400 for a family of two.

 

On the other project, across the street from its partner site, CPC Resources will spend $29 million to develop 72 units of affordable family housing and another 11,000 square feet of commercial space.

 

A third piece of the plan is for seven market-rate town houses, which are to go up behind the over-55 apartment site.

 

The village acquired the three acres for the projects by taking some of the blighted area through eminent domain and buying the remainder.

 

In all, it spent $6 million to buy land and relocate tenants, raising the money for the project mostly through municipal bonds, said Bruce Levine, the village’s lawyer. The property was then sold to the developer for $2 million.

 

CPC Resources, which has worked in the Bronx, Brooklyn and the village of Catskill in Greene County, often picks distressed areas that other investors shy away from, Mr. McGrath said.

 

For example, in Catskill, the group acquired three buildings destined for demolition several years ago and spent $2 million renovating them for affordable and market-rate residences.

 

“That in turn sparked more private investment along the street,” Mr. McGrath said. “Other property owners were inspired.”

 

In Spring Valley, Tony Chau, whose family has owned a small Chinese restaurant on Main Street for two decades, was among the businesspeople displaced when the developers razed the buildings for the over-55 project. On a recent afternoon, as groundbreaking ceremonies proceeded on one corner of the lot, Mr. Chau stood to the side and pointed to the area where his business once stood, expressing hope that he and his family would soon return to one of the new storefronts.

 

“For now,” he said, “I’m surviving by working at Costco, but the village has promised to help us return. It will be nice to have a restaurant in a downtown that is making a comeback.”

 

Not everyone, however, is optimistic that the village’s current urban redevelopment efforts will really help its poorer residents. Bettie J. Brown, a village trustee until last year, said that she feared the onset of gentrification. The two-square-mile village is among the poorest municipalities in the county, surrounded by more affluent communities.

 

“I’m very much in favor of revival in the downtown,” said Ms. Brown, an assistant records manager for the town of Ramapo, of which Spring Valley is a part. “But we need to make sure there remains room for a mix of economic levels.”

 

Mr. Levine, the village lawyer, explained that as part of its urban redevelopment efforts, Spring Valley was creating a mix of affordable and market-rate housing. “It’s a mythology to think of this as gentrification,” he said. “We are deliberately mixing the types of housing.”

 

In addition to the 125 affordable units to be developed by CPC Resources, he said, the village is working with private investors to develop 150 market-rate units.

 

Financing is being provided through a combination of private and public funds. These include an $8.4 million construction loan from JP Morgan Chase, $9.5 million from Centerline Capital Group, a $1.8 million low-interest loan from the state, and $795,000 from the Federal Home Loan Bank’s Affordable Housing Program.

 

CPC Resources has developed and owns more than 7,500 units in New York, representing about $745 million in projects. The parent company, CPC, has financed more than $6.9 billion for more than 147,000 units of housing since its founding in 1974.

 

When working in downtown areas, officials for both organizations say, they seek to foster a blend of residential and commercial properties.

 

In New Rochelle, a downtown in lower Westchester County that, like Spring Valley, faded with the ascent of shopping malls, CPC lent funds to a private developer to convert a vacant Bloomingdale’s store into condominium lofts in 2002.

 

Another approach that CPC employs in New Rochelle is to lend to building owners so they can restore the facades on historic buildings and convert floors above storefronts to residential units.

 

“Malls are fine for buying clothes and shoes,” said Isaac C. Henderson, the project manager in Spring Valley. “But main streets are where you go for your daily shopping, which is why the mixed-use concept works best.

 

“Before the big-box era, places like Spring Valley’s downtown were real destinations. The idea is to make that so again.”

 

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