A highly regarded New York charity that helped build or rehabilitate tens of thousands of apartments in working-class neighborhoods nearly went under after investing heavily in condominium projects during the housing boom, writes The New York Times.
Established in 1974, the Community Preservation Corporation played a key role for decades in reviving struggling New York neighborhoods, raising capital from banks to finance low-income housing.
In the 2000s the organization poured hundreds of thousands of dollars through a for-profit arm into luxury and mixed-income condo developments, saying more upscale projects would benefit local neighborhoods. But the ventures went bust during the recession, leaving Community Preservation in default on more than $150-million in loans.
Last year the organization forced longtime Michael Lappin into retirement, slashed executive salaries, and laid off 40 percent of staff. In January, lenders bailed out the charity in a deal that extended its troubled revolving-loan program.