You may have noticed the “75% off” sale signs pasted all over the 7-Eleven store at 403 Grand St. There’s a reason for that, of course. The chain store’s landlord, the Seward Park Cooperative, confirmed last night that 7-Eleven is closing this location at the end of August.
Back in 2013, there was a huge controversy over the Grand Street lease. While the co-op was looking for a stable commercial tenant, many local residents were strongly opposed to a national chain coming to this stretch of Grand Street.
Doron Stember, a board member at Seward Park, tells us management received a letter from 7-Eleven’s corporate offices advising the co-op that the company would be vacating the space with several years remaining on its lease. There are significant penalties in the lease for breaking the agreement, meaning 7-Eleven will be paying rent at 403 Grand for many months. Stember said 7-Eleven did not specify why it’s walking away from the Lower East Side store.
According to a memo sent to Seward Park residents Tuesday morning, 7-Eleven had a “corporate guarantee” for the first five years (that amounted to almost $1 million in rent). The early termination clause requires the company to pay $174,000 for terminating the lease (that’s equivalent to 13 months of rent).
Meanwhile, more chain stores are set to open directly across the street. Target opens a new store this week as part of the Essex Crossing project, and Trader Joe’s will be following suit in the same building in the early fall.
Months after its dramatic departure from Grand Street, Seward Park Liquors has relocated to a new storefront at 53 Ludlow St. (between Grand and Hester streets). The new shop is open this week, although the staff is still getting the shelves fully stocked.
Last year, the board of the Seward Park Co-op decided not to renew Seward Park Liquors’ lease in a space it owns at 393 Grand St. The proprietor, John DeBlasio, had been engaged in a contentious battle with his landlord to remain in a store he’d occupied for more than four decades.
The State Liquor Authority this past April approved DeBlasio’s plan to move his store to Ludlow Street. According to the SLA’s online database, the license was activated on July 24.
Meanwhile, the would-be operators of a new liquor store at 393 Grand are still hoping to win approval from the State Liquor Authority for a permit. After approving Seward Park Liquors, SLA commissioners rejected an application from “Vin Family Inc.,” calling the area oversaturated. In an appeal, Vin Family is making the argument that the entire area below Grand Street to the East of Suffolk Street has now been left under-served.
When the applications were being considered this past spring, parents at P.S. 42 complained to the SLA that Seward Park Liquors’ new location was in violation of the 200 Foot Rule, which prohibits liquor permits in close proximity to schools and churches. Their plea was backed up by SPaCE, the local neighborhood association, but the SLA ruled that the new liquor permit was not in violation of the law.
A final bit of Seward Park Liquors news: DeBlasio has filed a lawsuit against the Seward Park Co-op, claiming that management deprived him of his livelihood on Grand Street. The co-op has declined to comment about the pending litigation.
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.
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.
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.
393 Grand St.
The long, strange saga surrounding Seward Park Liquors just got a little weirder.
Last year at about this time, the board of the Seward Park Cooperative decided not to renew the liquor store’s lease, in favor of a new wine and liquor merchant. After a contentious, public battle, owner John DeBlasio vacated the storefront at 393 Grand St. in January. After doing business for more than 40 years in the same spot, he made plans to move to another location a few blocks away.
Both DeBlasio and the new operator, Vin Family Inc., appeared yesterday before the State Liquor Authority (SLA). DeBlasio was approved for a permit at 53 Ludlow St., while the new Grand Street business was denied. In rejecting the liquor permit at 393 Grand St., commissioners said the area was over-saturated.
Vin Family principal, Anastasia Ceballos and store manager, Kevin DeBernardi, plan to file an appeal. Meanwhile, DeBlasio intends to open his new store in a couple of weeks, after renovations are concluded.
Last October, the State Liquor Authority, blocked the new Grand Street permit because Seward Park Liquors had two outstanding violations (one for selling liquor to an underage customer, one for processing a purchase with an EBT card). Fines for those violations were later paid, presumably clearing the way for both liquor permits to win approval yesterday.
While the Vin Family application was listed earlier on yesterday’s agenda, DeBlasio ended up being heard first. In approving the Ludlow Street license, the SLA stated that Seward Park Liquors had no violations since 2002 (there was apparently some kind of bookkeeping snafu). When it was Vin Family’s turn, the commissioners ruled that, while the applicants were qualified, there were already too many liquor stores in the neighborhood. The owner of Delancey Wine, located at 35 Essex St., showed up to protest both new permits.
You can click here to read our past stories regarding the Seward Park Liquors-Seward Park Co-op saga.
53 Ludlow St.
Photos courtesy of My Little Village Preschool.
My Little Village Preschool will be opening this coming summer at 383 Grand St., a space owned by the Seward Park Cooperative. A lease was signed with the co-op last week.
The school has been located up on Avenue A for the past 15 years. Amy Kraus, My Little Village Preschool’s founder and director, told us in a recent interview that opening day would be July 9. The space was previously occupied by Comprehensive Kids School, so only light renovations are required.
Right now the school serves 28 kids daily. The new location, around 5,000 square feet, will allow the preschool to expand significantly. Kraus said they’ll be able to accommodate up to 75 children, and there will be a new after school program for students ages 6-10.
Kraus said the move allows her team to create the “dream school we always envisioned.” The school will include an art room, library, multi-purpose room for dance and music and indoor and outdoor play spaces.
If you’re interested in learning more about My Little Village, check out their website.
367 Grand St.
Changes are ahead for several commercial spaces on Grand Street controlled by the Seward Park Cooperative.
In a written report to residents, the co-op’s board of directors said it had recently met with Alan Phillps about a proposal for an ownership transfer at Kossar’s Bialys. Phillips has been involved in a lot of different food industry projects, including a deli concept called Friedman’s Lunch (with locations in the Chelsea Market, Hell’s Kitchen and now the old Cafe Edison space in the Theater District). The board approved the proposal, noting that Phillips, “has been in talks with the owners and has plans to improve the space as well as the offerings of Kossar’s, without changing the name or the type of establishment.”
We reached out to Kossar’s co-owner, Evan Giniger, who said he’s thought about taking on some new investors to help expand the Kossar’s brand. Giniger says his lease requires him to submit any new owners for approval to the co-op board. Right now, he added, there are no commitments from any new owner and no signed contracts. So we’ll have to see what happens with the business in the next few weeks.
In 2013, Giniger and Marc Halprin purchased Kossar’s Bialys, a Lower East Side institution since 1936, from Juda Engelmayer and Danny Cohen. The space at 367 Grand St. received a major face lift in 2016.
The co-op board also reported that Ramiken Crucible, the offbeat and reclusive gallery, would be vacating its space at 389 Grand St. Last year, the gallery had intended to expand its space, taking over a portion of the former Seward Park Liquors storefront, right next door. That plan is now kaput, Seward Park Co-op General Manager Frank Durant confirmed this week.
As for the new liquor store going into the aforementioned space at 393 Grand St., Durant said violations for underage liquor sales must be cleared up by Seward Park Liquors before anything happens. There’s an upcoming hearing at the State Liquor Authority on the issue. The SLA will not issue a new license at the Grand Street address until the old violations are settled.
Finally, the co-op is moving forward with a lease for My Little Village Preschool, which is currently located at 33 Avenue A. They’ll be taking a space previously occupied by Comprehensive Kids School.
Clinton Street entrance – Seward Park Co-op’s parking garage.
A legal dispute at the Seward Park Cooperative over changes in the use of the residential complex’s parking garage ended yesterday when a state supreme court judge dismissed a lawsuit filed by residents against their own board of directors.
In March of 2016, the board voted to sign a contract with Icon Parking for management of an underground garage and surface parking lot at the large residential development on Grand Street. The change meant that 380 residents would lose their assigned parking spaces as the co-op moved to a valet parking model. Although no one lost their parking privileges, some residents were infuriated. Five of them filed a lawsuit, claiming that the board acted improperly.
In ruling yesterday, Judge Arthur Engoron granted the co-op’s motion for dismissal. He found that the board fulfilled its obligation to provide notice to residents about the change and concluded that the board was authorized to make the parking garage decision on behalf of the 1700+ shareholders living within the Seward Park complex.
The lawsuit was brought by Jose Cruz, Mahmoud El Wardany, Deborah Finston, John Tomaszewski and Don West. The co-op board said it changed to the valet system to allow a larger number of residents to use the garage and to make up a budget shortfall.
We have reached out to the residents’ group that sued the co-op. We’ll update this story when they respond.
Seward Park Garage Lawsuit- Decision by The Lo-Down on Scribd
393 Grand St.
The owner of Seward Park Liquors has gone public with his battle to remain in a storefront at 393 Grand St.
A notice appeared yesterday on the front door of the longtime Lower East Side business. It was titled “Urgent Message,” and authored by John DeBlasio, a tenant in the retail strip owned by the Seward Park Cooperative. The co-op is managed by Charles H. Greenthal & Co., which also oversees commercial leasing for Seward Park.
DeBlasio wrote, “After 43 years of service without missing a rent payment, the managing agent Greenthal, has decided to replace my services. The agent will receive a 6% commission for a new tenant.” He went on to say that the board of directors will be deciding between Seward Park Liquors and a new liquor store operator this coming Wednesday evening. DeBlasio urged co-op shareholders to contact members of the board, “by any means necessary to prevent a new tenant from taking over.” He said Greenthal is acting legally but that the move is, “immoral.”
DeBlasio concluded, “I have spent my whole life building a successful business and I do not want to see it pulled out from under me.”
In a statement, Seward Park General Manager Frank Durant said, “We are not looking to replace any commercial tenant. We are looking to negotiate a fair and equitable lease term that benefits the Seward Park Housing Corporation and its shareholders.” He added that it is the responsibility of both management and the board to do that.
According to DeBlasio, he and Durant came to terms on a new lease back in December but then Durant never got back to him to finalize the deal. DeBlasio indicated in an interview on Friday that a “term sheet” given to him would have required Seward Park Liquors to pay approximately $84 per square foot, about the same amount now being paid. There were to be 4% annual increases during the 10 year lease.
Durant, however, said the term sheet simply reflected an amount DeBlasio had been willing to pay and was not a firm agreement from the co-op. Management has contended that the price per square foot being paid by Seward Park Liquors is well below “fair market rent” on the Lower East Side.
Editor’s note: Seward Park Liquors advertises in The Lo-Down from time-to-time. The author of this story is a resident of the Seward Park Co-op. It is The Lo-Down’s policy to disclose whenever there’s a potential conflict of interest in any story.
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.
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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Shalom Chai at 357 Grand St., the last sit-down kosher restaurant on the LES, may be locked out on Wednesday.
Hundreds of residents of the Seward Park Cooperative will be eating out for awhile. This afternoon a gas line failed in one of four buildings (383-387 Grand St.), meaning people living in more than 400 apartments will not be able to use their stove tops or ovens for an extended period.