Seward Park Co-op Rejects $54 Million Air Rights Offer From Bialystoker Developers (Updated)

Renderings show possible buildings scenarios at 228 East Broadway.  These images were released in March of 2017.

Renderings show possible buildings scenarios at 228 East Broadway. These images were released in March of 2017.

The Seward Park Co-op has rejected an offer from developers of the former Bialystoker Nursing Home site to purchase air rights for $53.7 million.

Residents of the large Lower East Side complex voted on Tuesday. Results, released, today, show that 690 shareholders (apartment owners) voted in favor of the air rights sale, with 507 voting against. There were 30 abstentions. While the referendum won approval by a majority of residents voting this week, it did not reach the two-thirds threshold required for passage.

The developers, Ascend Group and Optimum Asset Management, wanted to acquire 162,000 square feet in unused development rights from the neighboring co-op. They planned to build 33 and 22 story towers on either side of the historic Bialystoker Nursing Home building at 228 East Broadway. The project would have included 210 luxury condos spread over 226,000 square feet. The development team vowed to build even if the co-op rejected the offer. They say the “as-of-right” project will include 140 apartments. New 17 and 20 story towers would cover about 78,000 square feet.

The co-op board spent months negotiating an agreement with the developers, and unanimously endorsed the sale. They argued that it was a “once-in-a-lifetime” opportunity to improve the cooperative’s financial situation. The aging buildings, constructed in 1960, face at least $12 million in mandatory maintenance projects. The proceeds also would have been used to pay down the co-op’s debt and to replenish emergency reserves.

There were vigorous campaigns from the developers, residents in favor of the sale and opponents of the deal. Some of the apartment owners whose views would be blocked by the new project raised their voices the loudest. Others argued that the general quality of life of the co-op would be harmed by the oversized buildings. After years of living in a construction zone (due to the huge Essex Crossing project), it became apparent that many residents are feeling development fatigue. The developers were not oblivious to the opposition. They sweetened their offer with $ 5 million for a four month “maintenance holiday.” Days before the vote, they came through with another $1 million for lobby renovations at Seward Park.

Developers plan to build on either side of the former Bialystoker Nursing Home building on East Broadway.

Developers plan to build on either side of the former Bialystoker Nursing Home building on East Broadway.

In a memo sent to residents last month, the board of directors stated, “In the absence of revenue from an air rights sale, we would be faced with a combination of increased debt, maintenance fees, and/or assessment fees that may result in untenable costs of living for some shareholders.” The board has made it clear that maintenance increases and new assessments were inevitable if the offer was rejected. The complex, formerly a limited equity middle income co-op, has a large number of fixed-income seniors.

In a statement today, the board of directors said, “Although the majority of voters favored selling air rights, the supermajority threshold required by our bylaws was not reached. The Board had prepared for both possible referendum outcomes and will move forward with refinancing our mortgage.”

In addition to the referendum, the co-op elected new board members Tuesday. The victorious candidates were Doron Stember (currently president), as well as incumbents Aaron Fineman and Erica Cullmann. Sidney Goudie, a new board member, was also elected. All of the winning candidates strongly supported the referendum, while two other candidates defeated this week opposed the air rights sale.

The Seward Park Co-op has more than a million square feet of undeveloped air rights. It could still build on its own property, but this was the only opportunity to sell development rights to an adjacent property owner.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

UPDATE 3:26 p.m. Wayne Heicklen, one of the developers, responded to the vote today saying, “Obviously we’re very disappointed. We thought that the shareholders would appreciate the fact that they are basically selling us something they otherwise can’t use or sell to anybody else and that this was kind of a onetime opportunity to be paid 54 million dollars.”

A spokesperson for the development team said they plan to move forward with the “as-of-right” plan for two smaller towers.

And then there’s this. An online petition went live today, purportedly from residents who favored the air rights sale. The petition, with no identifiable author reads, in part:

…in large part due to some very wealthy and selfish shareholders, we will now expect to see a maintenance assessment, a carrying charge increase and no new lobbies for a very long time. WE DO NOT ACCEPT THAT THE MINORITY CAN CAUSE SUCH HARDSHIP FOR THE MAJORITY! We reject that. On the basis of the fact that 57% of us demand that the sale go through. We are NOW demanding that the sale go through or that the shareholders are offered another chance to pass this referendum. The majority spoke and the minority here must not be able to cause further financial and quality of life damage to the rest of us.

(Opinion) Seward Park Resident Urges “No” Vote on Air Rights Offer

Diagrams show what the developers could build "as of right" and with Seward Park's air rights.

Diagrams show what the developers could build “as of right” and with Seward Park’s air rights.

The following opinion piece was written by Jerilea Zempel, who lives in the Seward Park Co-op. On Tuesday, residents there will vote on a $53.7 million deal to sell air rights to the developer of the former Bialystoker Nursing Home (more background here). The Lo-Down routinely accepts op/ed submissions relevant to the Lower East Side community. Opinion pieces do not reflect the editorial position of The Lo-Down, but only the viewpoints of each individual author. To submit an editorial/letter to the editor, use the following email: info@thelodownny.com

When I moved into Seward Park in the fall of 2003, I felt I was living at the last stop in Manhattan. It was a neighborhood the rest of the island had forgotten. I traded a West Village studio for a one-bedroom with a balcony. I heard about Seward Park from architects, but when I saw the apartments, each designed with light, air and a view onto the city, I realized how unique the place was. I figured then and still do, that this is my home for life. I think that’s an important aspect of my NO vote on the sale of Seward Park air rights to the Ascend Group. I am here for the long-term and I am considering the long-term effect of the proposed Ascend Towers on my home.

While the single tower that could be built without air rights is thin and ugly, the proposed massive two tower plan with air rights that hangs over the garage entrance is huge and grotesque. It will create a +/-32 story canyon just 40 feet from Building 2. Who wants to look at that forever? It’s an affront to the classic modernist design of Seward Park architect Herman Jessor, who created a fair and open community as much as a grouping of housing towers around green space. It’s heartbreaking that there is now a plan to sell out that uniqueness for a bundle of cash and a four month maintenance reprieve (some will get a lot more than others) and in turn will deprive a significant number of coop members  the air, light and views originally designed into their apartments. Where’s the community in that?

With only luxury condos and no affordable units, the Ascend project undermines the diversity of our surrounding community, too. Could it be the dream come true of our un-named former local politician who tried under the table for years to keep more people of color from coming into the neighborhood? But now there is only the market to blame. How progressive is that?

All this for a deal with a developer who says he can turn around and sell our air rights to anyone he wants and we can’t get out of it. All of this for a pile of fast money that we are told will solve all our financial problems in a single blow. Where have we heard this before? Seward Park Coop needs a secure long-term financial plan, not a quick-fix.

The Lo-Down welcomes comments regarding this story on our Facebook Page. 

(Opinion) Seward Park Residents Must Vote “Yes” on Air Rights Deal

Southwest view; development plan with air rights.

Southwest view; development plan with air rights. Renderings are designed to illustrate massing alternatives. Actual architectural designs have not been publicly released.

The following opinion piece was written by Uzi Silber, a resident of the Seward Park Cooperative.  On Tuesday, members of the co-op will vote on a $53.7 million offer from developers who want to acquire air rights from Seward Park (more background here). The Lo-Down routinely accepts op/ed submissions relevant to the Lower East Side community. Opinion pieces do not reflect the editorial position of The Lo-Down, but only the viewpoints of each individual author. To submit an editorial/letter to the editor, use the following email: info@thelodownny.com

Seward Park, where I’ve lived with my family for the past generation, has always been a community of opinionated iconoclasts. Lately we’ve been embroiled in an especially vitriolic mini civil war revolving around the sale of some of our valuable air rights.

Many residents contend that the issue is confusing and complicated. Actually, it’s neither: it’s merely clouded – by a lot of hot air.

Once all the irrelevancies, non-sequiturs and lesser items are cleared away, it’s pretty simple: tall apartment towers will rise beside our property. Either we vote YES and receive $40 million after taxes for our air rights — or vote NO, and get zero. That’s it.

It hit me again yesterday, as I gazed up at all the scaffolding and netting between buildings 3 and 4, and the steel bars holding up so many of our crumbling balconies. I mulled the eye-popping price tag for all this elaborate equipment needed just to prevent debris from landing on our iconoclastic and opinionated heads.

And then I asked myself: who would I rather have pay for all this: us, or the developer?

Interestingly, the two camps transcend demographics: It’s not about who we are or what we do – but whether we’re deluded or practical. In a nutshell, NO voters are focused on ‘What If’: what if the developer somehow coughs up another $30 million, or what if we build on the Apple Bank site ourselves one day?

In contrast, YES voters are focused on ‘What Is’: we need the money right now to fix our buildings, pay down debt, shore up our finances, protect the most vulnerable among us — while pocketing four months of maintenance.

The NO side offers absolutely no financially-based reasons for not accepting the $53 million on the table and provides no real solutions for dealing with our serious financial challenges, while helping the most vulnerable in our community.

Bottom line: YES voters are grounded in reality. NO voters are peddling fantasy.

So on Tuesday, don’t be an airhead: vote YES for selling air rights.

The Lo-Down welcomes comments about this story on our Facebook Page. 

Seward Park Co-op Residents Vote on $53.7 Million Air Rights Deal Tuesday

Developers plan to build on either side of the former Bialystoker Nursing Home building on East Broadway.

Developers plan to build on either side of the former Bialystoker Nursing Home building on East Broadway.

After months of contentious debate, residents of the Seward Park Cooperative vote tomorrow (Tuesday) on a proposal to sell some of their air rights to developers of the former Bialystoker Nursing Home for $53.7 million.

As the New York Times noted in a story posted Sunday, the offer from the Ascend Group/Optimum Asset Management, “has disrupted the leafy quiet of the four-building brick complex, pitting neighbor against neighbor.”

If the proposal is approved by at least two-thirds of those participating, the developers say they will build a 210-unit luxury condo complex on three lots at 222-234 East Broadway. In addition to renovating the landmarked Bialystoker building, they plan towers (33 and 22 stories) on two adjacent lots. They have vowed to develop the sites whether or not the co-op sells 162,000 square feet in air rights. The difference between the two plans is, however, considerable (78,000 square feet “as of right” vs. 226,000 square feet with the air rights).

Diagrams show what the developers could build "as of right" and with Seward Park's air rights.

Diagrams show what the developers could build “as of right” and with Seward Park’s air rights.

On Friday, the development team sweetened the offer, which had previously been set at $52.7 million. They put another $1 million on the table to help the co-op renovate its lobbies. They even wined and dined residents last night with a party in the co-op’s community room, with food and an open bar.

The board of directors has unanimously endorsed the air rights sale, arguing that the big pay day ($39 million after taxes) will allow the co-op to stabilize its finances. The board would allocate $12 million for mandatory maintenance projects, including the replacement of crumbling balconies and all 25 elevators in the complex. Another $22 million would be devoted to reducing the co-op’s debt and replenishing reserves and emergency funds. $5 million has been designated to give residents a “maintenance holiday,” (a gesture that opponents call a bribe). The board has warned that steep maintenance increases and assessments will be required if the referendum is voted down. Some residents can afford to pay higher fees. Others, including hundreds of fixed-income seniors, would be imperiled, supporters of the air rights sale say.

Some of the most vocal opponents live in apartments facing East Broadway, which would lose their views, as well as light and air if the new buildings go up. A number of detractors argue that the board is making the co-op’s financial situation seem more dire than it really is. Others speculate that the developers won’t build if the air rights deal is rejected, or that they’ll come back with an offer that’s even more lucrative. There’s obviously widespread fatigue with over-development on the Lower East Side. Some opponents of the sale believe this referendum offers a rare chance to tell a developer, “No more.”

There are more than 1,600 apartments at Seward Park, spread across four buildings. The referendum will only pass if two-thirds of those voting, cast “yes” ballots.

Over the weekend, The Lo-Down received unsolicited op-ed submissions from residents on both sides of the issue. You can read them here and here.  You can read our previous coverage of this issue here.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

 

Seward Park Co-op Votes June 12 on $52.7 Million Offer For Air Rights

bialystoker site

There’s finally a referendum date at the Seward Park Cooperative for the potential sale of air rights to a team developing the former Bialystoker Nursing Home site on East Broadway.

In a letter from the board of directors sent today, residents of the large Lower East Side complex were told that the vote will take place June 12. The developers from the Ascend Group and the Optimum Group have now agreed to pay $52.7 million for 162,000 square feet of development rights. That’s up from $48.6 million in an earlier version of the agreement.

If the referendum is approved by at least two-thirds of those participating, the development team plans a 210-unit luxury condo complex on three lots at 222-234 East Broadway. The existing building, a city landmark, would be renovated. Meanwhile, the developers have said they plan towers on either side of the vacant structure. On the eastern parcel, there would be a 33-story building with a 12-foot cantilever over a ramp leading to Seward Park’s underground parking garage. On the western parcel, the former site of Dora Cohen Memorial Park, there would be a 22-story tower. Taken together, the new buildings would encompass 226,000 square feet.

Until now, the board  has refrained from stating a position on the air rights proposal. But according to today’s letter, all 11 directors have now endorsed the deal, calling it, “in the best interest of the coop overall.”

“The proposed transaction is a once-in-a-lifetime opportunity not only to secure affordability for all of Seward Park’s shareholders,” they asserted, “but also to dramatically improve the financial and physical status of the coop. In the absence of revenue from an air rights sale, we would be faced with a combination of increased debt, maintenance fees, and/or assessment fees that may result in untenable costs of living for some shareholders.”

The board outlined how the proceeds would be used (the co-op expects to have $39 million on hand after taxes). $12 million would go for required maintenance projects in the sprawling complex on Grand Street. These projects include the reconstruction of 32 “structurally unsound” terraces and the replacement of all 25 elevators. Another $22 million would be devoted to reducing the co-op’s debt and replenishing reserve and emergency funds. The board is also planning to waive maintenance fees for four months if the referendum is approved. Once the debt is paid down, the co-op expects each household would save an average of $1,800 annually.

Massing diagrams show porential development options on the Bialystoker sites.

Since the proposed air rights transaction became public in late 2016, there have been many shareholder meetings and a robust debate among residents about the development deal. Rising property taxes, reduced flip tax revenues and the costs of maintaining buildings that are nearly 60 years old have created significant financial pressures.

The formerly limited equity co-op’s more than 1,700 apartments became market rate in 1997. Two-bedroom apartments routinely sell for more than $1 million today. But about 40% of the residents at Seward Park are original cooperators, many on fixed incomes. The board is presenting the air rights sale as a rare opportunity to protect them.

“The Board firmly believes that taking actions to preserve value and affordability for all shareholders,” the letter stated, “and maintaining the multigenerational and diverse nature of the coop are fundamental responsibilities of the Board and consistent with the founding principles of cooperative living.”

Winning approval, however, will not be easy. Residents in some buildings would lose their views, as well as light and air. There are also concerns about adding more apartments in the neighborhood on top of the residential units and retail coming to Essex Crossing and other projects. Traffic congestion on the streets surrounding the Seward Co-op has already grown noticeably worse. Under current open space rules, owners of the new complex would not have access to the co-op’s expansive outdoor spaces. But, as the board noted, it can’t guarantee those “longstanding” rules won’t be changed in the future.

Rendering shows cantilever over the co-op's parking ramp.

Rendering shows cantilever over the co-op’s parking ramp.

The developers say they will build on the Bialystoker site even if the air rights sale is rejected. They floated an “as-of-right” plan that includes a 17-story tower on the eastern lot and a 20-story tower to the west of the existing building. But the co-op’s real estate experts believe it’s more likely they would put up a single, narrow 30-story tower to the east of the Bialystoker building. In a memo sent to residents last year, the development team stated, “At any moment and without the consent of the Coop, Ascend/Optimum can adopt its as-of-right plan or design a completely new one that conforms to its existing development rights.” The developers could build about 78,000 square feet on the two lots as-of-right.

Seward Park has 1.3 million square feet in unused development rights. But the board has said the current proposal is the only opportunity to transfer air rights to another property owner. In order to use its remaining development rights, Seward Park would be required to build on its own property.

The developers initially offered $20 million for Seward Park’s air rights. In March of 2017, the board voted to call a referendum, but no date was set. During the past year, the co-op’s lawyers have been negotiating the final deal that has now been presented to residents.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

Developers Launch Campaign to Push Through Seward Park Air Rights Sale

Southwest view; development plan with air rights.

Southwest view; development plan with air rights. Renderings are designed to illustrate massing alternatives. Actual architectural designs have not been publicly released.

Tonight the developers of the former Bialystoker nursing home site kick off a high stakes campaign to persuade the Seward Park Cooperative to sell some of its air rights for $48.6 million.

The team at the Ascend Group/Optimum Group is planning to convert the historic eight story building at 228 East Broadway to condos and to build residential towers on either side of the landmark-protected structure. In October, the coop’s board of directors signed a letter of intent to sell 162,000 square feet of development rights if shareholders approve the sale in a referendum. Informational sessions are beginning this week, and this evening the developers are opening an information center on Grand Street, complete with 3D models.

Before the Thanksgiving holiday, Seward Park residents received an “air rights FAQ” from the developers. In the referendum, which has not yet been scheduled, two-thirds of those voting must approve of the transaction for it to go forward.

If the air rights are acquired by Ascend/Optimum Group, the developers plan a 33-story tower to the east of the existing Bialystoker building. It would include a 12 foot cantilever over a ramp leading to Seward Park’s underground parking garage. They would also build a 22-story tower to the west of the Bialystoker, on the former Dora Cohen Memorial Park site. The two buildings together would total around 226,000 square feet.

In the memo to Seward Park residents, the developers are emphatic about building on the sites whether or not the coop sells its air rights. “At any moment,” the FAQ states, “and without the consent of the Coop, Ascend/Optimum can adopt its as-of-right plan or design a completely new one that conforms to its existing development rights.”

The current as-of-right plan calls for putting up a 17-story tower on the eastern lot and a 20-story tower on the western lot. In this scenario, the total square footage of the new buildings would be about 71,000 square feet, and there would be no cantilever.

Southwest view; as-of-right development plan.

Southwest view; as-of-right development plan.

The developers have hired a consulting firm, Global Strategies Group, to help sell the air rights plan to Seward Park residents. The coop has also brought on a consultant, NYC Meeting Facilitators, to coordinate outreach to shareholders. The proposal has already proved controversial. Some residents are convinced that the cash infusion would help relieve financial pressures brought on by spiraling property taxes. Others are weary of over-development in the neighborhood and believe the project would erode quality of life on the Lower East Side.

The developers have set up a website with more details about the project. The coop also has a site with additional information. Meanwhile, a group of concerned shareholders has established a website, which raises questions about the proposed air rights sale.

We’ll have more details as they become available.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

 

Value of Potential Seward Park Co-op Air Rights Deal Rises to $48.6 Million

Renderings show possible buildings scenarios at 228 East Broadway.  These images were released in March of 2017.

Renderings show possible building scenarios at 228 East Broadway. These images were released in March of 2017. While developers could build on two separate parcels, a single tower to the east of the former Bialystoker nursing home building is more likely.

The board of the Seward Park Cooperative is inching toward a referendum on the sale of air rights to a development group planning a large residential project alongside the former Bialystoker Nursing Home building at 228 East Broadway.

On Wednesday evening, the board of directors approved a letter of intent that spells out terms of the potential sale. The deal will only go through if two-thirds of those shareholders participating in the referendum vote in favor. A date for the referendum has not yet been chosen. That will follow a community outreach effort at the co-op, which includes more than 1,700 apartments in four buildings on Grand Street.

A joint venture by the Ascend Group and Optimum Group has agreed to pay $48.6 million for 162,000 square feet in development rights. It would also reimburse the co-op for costs associated with the transaction. Last year, the developers purchased the former nursing home building, which is a city landmark, as well as parcels on both sides of the vacant property. In March of last year, we reported that the joint venture had committed to paying $46.5 million for 155,000 square feet. During negotiations, the potential size of their project and the price have risen. Earlier this year, the developers said they would build on the easternmost parcel, 232 East Broadway, with or without the air rights. They envisioned a 31-story tower if the co-op agrees to sell its development rights.

According to a memo sent to shareholders yesterday, the co-op has brought on a firm called NYC Meeting Facilitators to conduct, “a robust process to engage shareholders” about the potential sale.  Meanwhile, the Ascend Group has hired a communications firm, Global Strategies Group, to coordinate its own outreach campaign. Once the co-op’s tax specialist calculates the net proceeds from the proposed sale, residents will discuss how the co-op would invest/spend the profits. Seward Park has faced financial strains in the past several years, due to rapidly increasing property taxes and costly repairs within the 1960s-era buildings. 

The referendum was supposed to have taken place this past summer, but it was delayed. The issue has already been contentious, with some residents wary of the new project and others optimistic about a big payday.

The developers are just finishing up the demolition of 232 East Broadway, an office building next door to the nursing home tower.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

 

Bialystoker Property Owners Agree to Pay $46.5 Million For Air Rights; Seward Park Co-op Vote Planned

Renderings show possible buildings scenarios at 228 East Broadway.

Renderings show possible building scenarios at 228 East Broadway.

The board of directors of the Seward Park Cooperative last night voted to schedule a referendum on a proposed sale of air rights to the developer of the former Bialystoker Nursing Home site at 228 East Broadway. After months of negotiations, a memo from the board indicates, the development team has agreed to purchase approximately 155,000 square feet of air rights for $300/sq. ft. If approved in the referendum, the deal would mean a payday for the co-op of about $46.5 million.

Last November, the vacant 1931 Art Deco building and development parcels on either side of the city landmark were sold for $47.5 million. The neighboring cooperative was approached a short time later by the new owners, Rob Kaliner of the Ascend Group and Wayne Heicklen, about the air rights acquisition. They originally offered $125/sq. ft., or about $20 million.

The developers are planning to create luxury condos within the existing landmark-protected building. They also intend to put up a 31-story tower to the east of the Bialystoker, where a four story office building now stands, and a 19-story tower on the site of the Dora Cohen Memorial Park, bordering Clinton Street.

According to the board’s memo, which will be distributed today, shareholders of the large cooperative complex will be asked to vote on the proposal in late May or early June. Two-thirds of those voting must approve the measure for it to go through.

Renderings show cantilever options on East Broadway.

Renderings show cantilever options on East Broadway.

The Seward Park Co-op commissioned an appraisal of its air rights, which total more 1.3 million square feet on three parcels. That appraisal determined the value of the development rights sought by Kaliner and his team to be $300 sq. ft. The developers eventually agreed to the co-op’s financial terms. In addition to negotiations over the purchase price, the two sides also haggled over a proposed 17-foot cantilever that would hang over a parking garage ramp on the co-op’s property. The developers agreed to reduce the cantilever to 12 feet.

“At a special meeting on March 22, 2017,” today’s memo stated, “the Board voted to submit these terms to shareholders for a referendum, believing that the offer represents maximal value to the co-op in terms of price and cantilever scenario, and that the shareholders deserve the opportunity to vote on a transaction.”

The co-op’s attorneys are continuing to negotiate the fine points of the agreement with Kaliner, Heicklen and their equity partner, Optimum Group. When the final proposal is presented to shareholders, the board is required to detail how it will invest/spend the proceeds from the air rights sale.

There are more than 1700 apartments in the four-building Seward Park complex. The debate leading up to the vote is sure to be contentious. Proponents of the air rights sale point to the cooperative’s financial challenges. Spiraling property taxes and maintenance costs forced a maintenance increase this past year. Opponents, however, are concerned about the scale of the proposed project, which will impact the views of some south-facing apartments. Anonymous emails and written materials have been circulating, which raise concerns about the developers’ previous condo projects (we’ll have more about this in a future story).

If the deal is rejected, Kaliner is expected to move forward with a substantial as-of-right project. He’s signaled to the board that a single 26-story tower to the east of the Bialystoker building is likely.

The developers are preparing to demolish the office building at 232 East Broadway. According to the Seward Park board, “the co-op’s engineers have already done preliminary tests of structures and systems to ensure that our property will not be significantly impacted by the demolition.”

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

228 East Broadway.

228 East Broadway.

 

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Seward Park Co-op Weighs Air Rights Sale to Developers of Bialystoker Property

228 East Broadway.

228 East Broadway.

There have been some interesting revelations in the last couple of weeks about the future of the former Bialystoker nursing home.

Last month we reported that the city landmark at 228 East Broadway and development parcels on either side of the 1931 Art Deco building had been sold for $47.5 million.  The previous owners paid less than $18 million for the property after the home was shuttered a few years ago. In our original story, we noted that developer Rob Kaliner of the Ascend Group was weighing the purchase of air rights from the neighboring Seward Park Co-op.

Earlier this week, members of the co-op’s board of directors briefed residents of the large housing complex about the offer on the table. The developers, according to the presentation, are potentially planning new residential towers on either side of the Bialystoker building. They plan to create more apartments within the historic building after extensive renovations take place.

If the cooperative chooses to sell approximately 155,000 square feet in development rights, the project would span about 230,000 square feet in the two towers. Diagrams show a 31 story building on the east side of the landmark (where a four-story office building now stands) and a 19-story building on the corner of Clinton Street and East Broadway. In this scenario, both towers would have larger footprints. A portion of one building would hang 17 feet over a parking garage driveway on Seward Park’s property. If the co-op says “no” to the air rights transfer, developers are considering a number of options. One version shown to shareholders envisions 17 and 19 story towers.

southwest-view

southeast-view

overhang-1

During a recent interview, Kaliner and Wayne Heicklen, his business partner, declined to talk in detail about the possible acquisition of Seward Park’s air rights, out of deference to the co-op’s board of directors. They did, however, discuss in general terms the plan for the Lower East Side development site.

They indicated that SLCE, the architectural firm hired for the project, has not yet designed the buildings. The height and size of the towers could change significantly from the massing diagrams shared with the Seward Park Co-op. They emphasized that their as-of right-plan would likely involve building a single tall tower to the east of the Bialystoker building. Under current zoning and with no additional development rights, a narrow tower could rise above 20 stories, they said. The co-op buildings are 21 stories.

Kaliner and Heicklen said they’re not planning to put up “glassy” towers, but buildings that are “contextual” to both the Bialystoker building and the blocks immediately surrounding the development site. “The towers will look like they belong in that location,” said Kaliner. “We want to be respectful of the location. The mission for the architect is to evoke the feel of the Bialystoker.”

The condominium apartments in all three buildings will be luxury units, but the developers say they won’t be aimed at the “super-luxury market.” The apartments, he said, would be “tight and efficient.” A major selling point will be the spectacular, unobstructed views from the high floors in the new towers. The developers pointed to two previous projects – 133 West 22nd St. (a 12-story condo building in Chelsea) and the Georgica on the Upper East Side – as emblematic of the type of projects they build.

The air rights sale will only take place if two-thirds of the shareholders taking part in the vote agree. The co-op’s attorney, Deirdre Carson of Greenberg Traurig LLP, indicated that an offer has been received from the development team. While she did not indicate the proposed purchase price, Carson told residents the offer is, in her opinion, too low. “I think you could say with a certainty that the amount that could be realized from this sale would be at least $20 million,” Carson said. “We don’t know how much more than that would be possible.”

In a conversation Friday with Wei-Li Tjong, the board’s vice president, he said the price offered is $125/per square foot. That would work out to $19.3 million.

At the meeting, residents expressed a lot of skepticism. There were concerns about the loss of views and “light and air” in at least one building of the four building Seward Park complex. Others said they were worried about the influx of more residents in a neighborhood besieged with luxury development. Outside the confines of the meeting room, some residents were more enthusiastic about the offer. Given the cooperative’s financial strains (maintenance fees were recently increased), they’re at least willing to entertain the prospect of a multi-million dollar payday.

As Curbed reported several years ago, Seward Park holds more than one-million square feet in unused development rights on three different properties. At the time, it was estimated that those air rights could be worth $100 million.

A vote of the cooperative has not yet been scheduled. That won’t happen until the board of directors and its attorneys complete negotiations with the developers. The co-op has commissioned its own appraisal.According to Tjong, early indications from that appraisal show that the offer from the developers “significantly undervalues” Seward Park’s air rights.

The board has not taken a position on the potential air rights sale. “Our responsibility,” Tjong said, “is to negotiate the best deal that we can and put it to a vote.” He called the transaction, “potentially very valuable” to the more than 1700 shareholders in the Seward Park Co-op, but also “potentially very impactful to the quality of life of residents.”  The board will be required to detail for all shareholders how the proceeds from the air rights sale would be spent.

The developers have said they want to begin construction by the springtime, so there’s some pressure on the co-op to act quickly. In a followup interview today, Kaliner said it’s important to him that residents have all of the facts about the potential transaction. “I think everyone should be equipped with the information to make an educated decision,” he said.

Editor’s note: The publishers of The Lo-Down are residents of the Seward Park Cooperative. It is our policy to disclose any potential conflicts that arise in our reporting.

 

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