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Newsday
Monday, February 28, 2005
Edward Poteat told his mother seven years ago that he planned to give up his job as a loan officer at Chase and join two friends to start a real estate business in Harlem.
She was not enthusiastic.
As Poteat recalls, her view was: "You're an idiot to give up this nice job you have at the bank." And for a while, she seemed to be right.
Their first year, Poteat and his brother-sister partners, Robert and Alyah Horsford, each took home a salary of $15,000, not nearly enough to live on when you're in your mid-20s and have college loans to pay off.
Today it's a different story. Poteat and his partners are grossing more than $6 million a year in Harlem's booming real estate market. And his mom, now a believer, is a real estate broker working in the office, a storefront in a series of buildings on West 116th Street, that the firm took over from the city and renovated.
Horsford & Poteat Realty is among dozens of companies that have worked with the city to virtually eliminate its 1980s-era inventory of nearly 10,000 foreclosed buildings with more than 90,000 apartments. Poteat's company has renovated 600 units of low-priced housing. They win high marks from city housing officials.
"They're young, they're dynamic and they're very committed to community development," says John Warren, first deputy commissioner of the Department of Housing Preservation and Development. "They delivered what they said they were going to do in a timely way, and that's really what counts."
Poteat, 31, is a soft-spoken but driven man who reels off the key numbers, dates and details of the $40 million in projects his firm has done. He and his partners are like many in their generation who yearn to run their own businesses rather than work for other people. Since they grew up in Harlem and saw it in bad times, they also share a commitment to restore its health and vibrancy.
And they've got the wind at their back. Last week, a report by appraisers Miller Samuel Inc. for Prudential Douglas Elliman confirmed what many who have watched the Manhattan real estate scene already knew: Harlem is hot. The average price of condos and co-ops in Harlem and East Harlem last year hit $411,112, up 24 percent in a year, and nearly 150 percent over the past decade.
As Poteat points out, "New York added a million people between 1990 and 2000, so residential real estate got hot."
With crime on the wane and the city pouring money into housing programs, neighborhoods in Harlem, Bedford-Stuyvesant and the South Bronx turned around.
Former Mets first baseman Mo Vaughn got into the act Wednesday when he and Mayor Michael Bloomberg announced that Vaughn and his partners would renovate two Bronx rental buildings.
Newcomers to the city have a hard time realizing how much the city has changed, Poteat says over the noise of hammers and drills in his office. "It's safe, you know, all these hip, trendy neighborhoods, but it's funny talking people through it and saying, 'Listen, these same neighborhoods, you couldn't walk in 15 years ago.'"
As a child growing up on 110th Street in the Schomburg Plaza housing complex, Poteat wondered about the disparities that separated two side-by-side neighborhoods - East Harlem, one of the poorest in the city, and the Upper East Side, one of the richest in the country. He took that interest with him to Yale, where he majored in economics and urban planning, and even now, in his spare time, he's studying for a master's degree in urban planning at Hunter.
At Chase, Poteat met Lewis Jones, then a senior vice president of the bank and now, at 53, president of the JPMorgan Chase Foundation.
"We had several things in common," Jones says, "We both grew up in Harlem, both from modest backgrounds, both went to the same prep school. We were scholarship guys at Horace Mann."
Jones, who went to Harvard, jokes that "Ed is still recovering from being a Yale graduate."
Poteat joined a Chase real estate lending unit overseen by Jones and learned how projects are financed. He says his boss was supportive when he told him of his plan to go into business for himself.
Jones seems proud of his protege.
"He's done well financially, he's improved the lives of others in his work, he's employed others and created a very successful and satisfying life for himself," Jones says.
In creating the company, Poteat's financial expertise was complemented by Robert Horsford's background in engineering and construction - he was a project manager for Bell Atlantic - and Alyah Horsford's experience in property management as an employee of HPD.
In 1999, the company was selected under the city's neighborhood entrepreneurs program to renovate eight rundown buildings in a drug-infested block on West 149th Street and Eighth Avenue. The $10-million project created 105 units of affordable housing. Other city projects, including $16 million worth of added work on 149th Street, have followed.
Horsford & Poteat has been profitable for the past couple of years, though Poteat won't say how much has fallen to the bottom line. He will tell you his goal: to reach $20 million in annual revenue by 2007 and eventually triple that. The firm has opened an office in Baltimore, where he sees opportunities in blighted neighborhoods similar to those of New York in the 1980s.
Naturally enough, Ed Poteat has no regrets about leaving the bank.
"Even though we still work a lot of long hours, a lot of weekends, it's nice not to have a boss," he says. "And when I talk to my friends who are doing well - lawyers, doctors, bankers - and they talk about what their boss said, I say, 'Oh yeah, that's why I don't ever give this up.'"
E-mail Richard Galant at rgalant@newsday.com