And the South Bronx Shall Rise Again

U.S. Real Estate Week, March 7, 1987

by Pearl Bosco

Editor’s note: The following is the first in a series of articles on grass-roots redevelopment of problem neighborhoods throughout the United States.

The fortunes of the South Bronx began to change with the visit of a distinguished southerner in 1977. When President Jimmy Carter stepped out of a limousine onto Charlotte Street, he faced an expanse of nibble where buildings once stood, and the South Bronx became a national symbol for urban failure, public and private. On the same site, nine years later, sits Charlotte Gardens, 90 units of ranch-style detached single-family homes, complete with shutters and shrubbery, made possible by a coalition of community groups, private developers, and financing assisted by city and state agencies. Some 1,500 apartments have been rehabilitated in the area. But Charlotte Street remains unpaved, its backdrop decaying tenements. The transformation is far from complete.

   The design of Charlotte Gardens proved unsuitable for the area. More important, bureaucratic and developer snafus postponed completion of the complex for several years and cost the city millions of dollars. Ultimately the city paid $150,000 per unit to develop houses that sold for $56,000. “Charlotte Gardens was a mistake,” says a local developer. “But the main thing is that it happened at all.”

   Charlotte Gardens proved there was a market for moderate income housing in the area, now a fledgling community of well kept single-family homes. Its neighbor-in-the-making, Salters Square, is an example of what has changed since then.

   Salters Square, which stretches along four city blocks from Crotona Park East to Home Street, is a project of the Procida Development Corporation, a Bronx construction firm. Last year some 600 middle-income families with incomes ranging from $36,000 to $48,000 a year vied for its 75 two-story, three bedroom townhouses at $92,000, says Genevieve Brooks, president of the Mid Bronx Desperados (MBD). The community organization sponsored and marketed Salters Square as well as Charlotte Gardens. Salters Square was sold out within three weeks. Groundbreaking is set for late this month.

   Salters Square is being built under the auspices of the housing arm of the New York City Housing Partership, a civic group which has 600 units of subsidized housing in place or committed. The Procida property will be the first participant of the $25 million per year New York State Affordable Home Ownership Development Program to support the development of private homes in neighborhoods that could not support market rate development.

   City and state subsidies totaling $25,000 include a 10 percent profit for the developer. Chemical Bank was the lender. The bank also accounts for 75 percent of the Housing Partnership’s activity.

   Who will inhabit Salter Square-with its modern white groundface block facades, red awnings, and blue window trim -and why? “A policeman, nurse, postal employee,” says William Procida, son of the firm’s president. The younger Procida created the firm’s development arm a few years ago. “Someone who earns $35,000 to $40,000 a year but has money in the bank. Probably he’s from the Bronx; he grew up there and hung on.”

   The obstacles to building in the South Bronx are formidable. Construction expenses rise because of vandalism, removal of buried rubble from earlier demolitions, and the cost premiums to attract contractors to the outer boroughs, says Warren Seidel, vice president and head of Chemical Bank’s Urban Development Group. Development and rehabilitation make more sense for local owners who do it all themselves. Even then they have to cope with the lack of developable land at viable prices.    Beyond that, “the paper work is astonishing,” says Marc Fein, a principal of the Bodak Organization, developers and managers of housing in the area for 32 years. Fein has been with the firm since 1975. He says that keeping up with the bureaucracy demands one full-time employee per building. “New York City housing is probably more regulated than the nuclear industry.”

   Bodak owns and manages 40 rent-stabilized buildings with over 3,200 units and has rehabilitated over 900 units through contracts with the City of New York’s Private Ownership and Management Program (POMP) administered by the Department of Housing Preservation and Development (HPD).

   One of Bodak’s recently completed projects on Wythe Place off 170th Street is part of the trend of rehabilitation spilling over from the Grand Concourse to nearby streets. (The City Planning Commission has proposed a special zoning to help keep its residential character.) Except for the new storm windows, the steam-cleaned brick building now bears some reminders of its late ’20s, middle-income vintage. A fountain and its decorative nude statue, both painted white, rise from the center of the courtyard.

   Principal Joseph Bodak has several awards for being an outstanding landlord. One story has it that because of subsidies, one of his tenants ended up paying less rent after a building was renovated than before. Another says that he personally sat in his buildings during the riots of the 1960’s to protect his territory. More recently, says Fein, the firm salvaged a fully occupied apartment house on Harrison Avenue by ignoring the threats of its few criminal tenants and evicting them through court action. Today it is the only building left standing on the block.

   Why is the company devoted to the South Bronx? “We’ve been here since the ’50s, we’re stuck with it,” says Fein. “As a borough, it has the best housing stock and one of the best concentrations of Art Deco buildings.”

   Procida also places great importance on the aesthetics of his new buildings and says that good design is not necessarily a function of money.

   If Bodak is the old guard protecting and revitalizing what is left of the old South Bronx, Procida and his counterparts look toward building the new Bronx. Experts disagree about whether rentals or home ownership is more viable for the area. Rentals built with subsidies would give the city control over the mix of tenants but so far have not been popular with developers. Home ownership improves a neighborhood’s morale, security, and property values, but to date is not feasible without subsidies. Right now there is a need for both.

   “I believe in the Bronx,” says Procida, who is considering other moderate-income townhouses there. Procida also successfully developed White Beach, a luxury waterfront condominium complex in the northern part of the borough, and is planning another. As for earning half as much profit in the South Bronx as elsewhere, Procida says, “The developer has no virtually no risk in a high-risk area other than getting the building up. The bank has no risk either, because the units are presold before the shovel goes into the ground and the developer supplies his personal guarantee to repay the loan. The local community development groups take the rap. Their reputations are based on seeing a project through to the end.” It is up to them to assemble the land, choose the developer, and find a lender.

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