City, state and federal government agencies (HUD, DHCR, HPD) recognize Rainbow Capital USA for its valuable skills and expertise in specific areas of the New York real estate industry - particularly upgrading and renovating distressed multi-family properties and frequently select Rainbow to assume management responsibility of distressed properties in their portfolios.
Parkchester: five buildings, 350 units
In 1997, in a Freddie Mac foreclosure, Rainbow Capital USA purchased five contiguous buildings in the Parkchester section of the Bronx totaling 350 units and five elevators. The property was in a terrible state of disrepair with over 3,000 violations, and in the midst of a three-year, building-wide rent strike.
Rainbow partnered with Community Preservation Corporation (CPC), an agency specializing in funding the rehabilitation of distressed New York properties, and qualified for a $2.6 million construction loan.
Rainbow initiated a mod-rehab program for scheduled completion within 24 months. The scope of the project included renovating every unit, replacing all building-wide systems, including heating, plumbing, electrical plant, windows and roof.
Due to Rainbow's broad industry experience and hands-on oversight, completion was achieved within 13 months. For outstanding performance in the total renovation of the building complex, Rainbow was awarded the 1998 CPC Annual Award for Excellence for that year's "most changed property" throughout the entire city.
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Harlem: five buildings, 270 units
In 1999 Rainbow Capital USA was approached by a Deputy Commissioner of HPD to revitalize five distressed properties in Harlem. The property consisted of 270 units, and was under siege by drug dealing and petty criminal activity. All major systems required full replacement.
The city had granted a municipal loan to the property's owners a decade earlier. The owners defaulted and the property was facing a tax-lien sale, whereby the city faced losing millions of dollars of their equity. After several months of negotiations, Rainbow Capital USA assumed full ownership and management responsibilities for these properties.
Rainbow developed a five-year plan with the goal of salvaging the buildings and preventing the city from sustaining a huge loss. Rainbow paid the city millions of dollars of its own equity to remove the tax liens before entering a partnership with HPD using the 8-A loan program to qualify for a $10 million complete renovation loan for property upgrade.
Within five years, all building-wide systems were replaced and all drug and criminal elements removed from the property. At the close of five years, Rainbow fully reimbursed the city for its investment, at which time, the City of New York turned over the deeds of the property.
Today, these properties are rented to capacity, are drug dealer free, and have a sophisticated security system which assures the safety and well being of residents. Rainbow recently entered into the HPD 8-A Loan program to secure over $2 million for additional renovations.
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