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Red tape strangling condos

By Xenia Pamulaklakin, Staff Reporter

In the middle of the crossfire of Parkchester Condominium's battle for its future is Ed Watkins, president of the Parkchester South Condominium board.

Faced with rent strikers and disgruntled condominium owners -- and crumbling plaster, leaky pipes and shattered windows -- Watkins is indignant. He said government regulations make it almost impossible for the condominium boards to finance $100 million in desperately needed capital improvements.

"The city can't afford to lose Parkchester," Watkins said. "But I have not seen any attempt from their part to help us. All they do is blow smoke."

Parkchester's problems go back to early 1970, when its owners, a group of investors led by Harry B. Helmsley, started a bitterly opposed condominium conversion of the 171 low-rent apartment buildings designed for low- and middle-income residents.

The 50-year-old Parkchester North Condominium, made up of 55 buildings, was the first to be converted. In 1984, 11 years later, the 116 buildings of the South Condominium were also converted. Tenants said they feared the South might experience the same fate as the North buildings -- which after 10 years still haven't had the major improvements they need, like upgraded electrical and plumbing systems.

As they feared, the South's fate did follow the North's. No improvements were made, enraging both condominium owners and renters.

Watkins said it was not until nine months ago, when unit owners in the board wrestled the reins from the Helmsley group, that things started improving.

"There was clearly a conflict of interest here," Watkins said. "It used to be that they would always prioritize giving services to their renters and not to the condo owners, and instead of doing major replacements they do little repairs and patch-up jobs."

The quandary for the board is that while the complex desperately needs an infusion of money for capital improvements, the cost would kill individual owners and would drive away renters as rent and maintenance fees are raised to finance it.

One option is to get long-term state loans and capital investment tax rebates for unit owners. But existing law prohibits private developments with mixed residency (that is, renters and owners) from borrowing money from either the state or private institutions. Special legislation would be required to modify the current law so Parkchester and condos like it could get financing.

Democratic Assemblyman Peter Rivera has been working on a bill to change the law for the past year, but he said the election of a new governor and the appointment of a new state housing commissioner have complicated matters.

Nevertheless, said Rivera, "Before the end of June, the necessary modifications on the present housing and mortgage financing law will be done."

Meanwhile, Watkins said, if Rivera's plan fails, the board will be forced to go the hard way.

"We are looking for contractors who will be willing to capitalize the venture for us while we pay them in installment," he said.

The Bronx Beat, March 13, 1995