When Matt Linde and Udi Kore were first approached to develop the old site of St. John’s College’s campus in Bedford-Stuyvesant, Brooklyn, it was a dream come true for the two men who grew up in the area.
Linde, CEO of People Restoring Communities, and Kore, Founding Partner at Avenue Realty Capital, first walked through the property in the summer of 2017.
The building has had many names over the years since the cornerstone was laid in 1869. It has been known as the College of St. John the Baptist, St. John’s College, and St. John’s University, New York, before relocating to its current campus in Queens, which is now simply referred to as St. John’s University.
It was abandoned by the university after classes ceased in 1972 and had been deteriorating for decades. The Roman Catholic church next door, St. John the Baptist, used it for various purposes over the years, including as a nunnery and a boarding school.
“I think it looked like a great place to shoot a horror movie. Paint was chipping off the walls. Holes everywhere. Debris all over the floor, birds flying through it. It was clearly a severely neglected asset,” Linde tells CNBC Make It.
“Combine that with the beautiful bones of this building, amazing high ceilings, amazing arch windows, it wasn’t difficult to see the vision that you could take this building and turn it into something beautiful.”
Classes at St. John’s University’s Brooklyn campus stopped in 1972.
The Hartby
Following the initial walkthrough, the business partners agreed that the existing floor plans were suitable for converting the property into a luxury apartment building. After some negotiations, Linde was able to secure a 99-year ground lease from St. John the Baptist, which grants his company the right to construct and operate for the entire duration of the lease.
“At the end of the 99 years, unless the church agrees to let us extend it and sign another lease, the lease hold will return to the Catholic Church,” Linde says.
The partners say that, for the church, it was vital that the old college be preserved, but also converted for better use.
“It was very important for the church to keep the original elements of this structure, but find a way to convert it to a better use that will create some sort of income for the church,” Kore says. “They just wanted someone to come in and create a business plan that made sense for them to convert it and still be a really good part of the fabric of this neighborhood and that’s what we essentially did.”
The building sat empty and deteriorating for decades before Linde and Kore took over the project.
The Hartby
When Linde and Kore got on board with the project, they had to pay $3.7 million to take over the lease. In addition, they had to split the lots where the old college and St. John the Baptist sit so the church could maintain their tax exemption and the building could be taxed like any other property.
For funding, they secured a construction loan of $72,125,000 and had an additional…
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