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.
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.
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