Seward Co-op’s vote on air rights leaves developer ‘bewildered’

Developers plan to build a pair of residential towers around the former Bialystoker Nursing Home, at left, which neighbors the Seward Park Co-op. Co-op shareholders last week voted against selling a portion of their unused development rights to the Bialystoker project, which would have resulted in taller towers. Photo by Sydney Pereira

BY SYDNEY PEREIRA | In a historic vote at the Seward Park Co-operative, residents voted ‘No’ to selling $54 million worth of air rights to developers building at a nearby lot. The decision has rattled some residents who fear that fees to cover the co-op’s financial troubles will skyrocket.

The air rights would have gone toward developing two buildings next to the former Bialystoker Nursing Home, at 228 East Broadway. The Ascend Group and Optimum Asset Management were planning to construct buildings 22 and 33 floors high. But since the shareholders voted against the sale, the developers now intend to move ahead with their “as of right” plan for two shorter towers, one 17-stories tall and the other 20 stories.

“People who voted ‘No’ did so out of some kind of pride about kicking it to the man and saying ‘No’ to the developer,” said Dana Linett-Silber, who has lived in the co-op with her husband and three children since 1999. “It was very misguided — extremely misguided — and a lot of people are going to suffer as a result.”

The co-op, on Grand St. on the Lower East Side, is riddled with financial troubles that the $53.7 million air-rights sale would have helped to cover — including $12 million in mandatory maintenance projects, the co-op’s debt, and emergency reserves, as reported by the Lo-Down late last week.

“To people who understand what the facts are, it’s really beyond comprehension that people would vote ‘No,’” Linett-Silber said.

The balconies and elevators are two critical services that need to be repaired, she added. Without the extra cash from the air-rights deal, Linett-Silber and other shareholders expect the maintenance fees and assessments to increase, which would be particularly difficult for people on fixed incomes to pay, she noted.

The majority of shareholders who voted actually sided with selling the air rights — with 57 percent voting ‘Yes.’ But a bylaw requires a two-thirds vote in order for a motion to pass. Regardless of the vote, the developers are still going to build, which is what they have said throughout the ongoing year-and-a-half-long discussion.

“I’m bewildered,” said Rob Kaliner, owner of the Ascend Group, regarding the vote. “‘Bewildered,’ really, would be the number-one thing that comes to my mind.”

Kaliner said the sale is a disappointment, but the only changes for the developers is how tall the buildings will be. From the developers’ perspective, it’s a shock, but Kaliner added that the vote would affect the cooperative and board more than the developers.

Since the vote last Tues., June 12, Kaliner said shareholders have called asking him to come back to the table — some even lamenting to him about how the co-op will pay off its debt and maintenance repairs. Shortly after the vote, a petition for a revote began circulating among residents. The petition’s author and who first circulated it were unclear, but it read: “We, the majority of shareholders in the Seward Park Cooperative, are deeply troubled over the failure to pass the referendum on the sale of our air rights to the Ascend / Optimum development group.”

The petition blamed “some very wealthy and selfish shareholders” for an expected maintenance assessment and increased fees — plus, “no new lobbies for a very long time.” The petition further demands that either the sale go through or that shareholders re-vote. The online petition had 150 signatures as of Tuesday evening around 6:30 p.m.

“I received zillions of calls from shareholders asking, begging, pleading for us to come back to the table,” Kaliner said last Thursday evening. Kaliner said that after around having spent a year and a half in talks with the co-op’s board, they plan to forge ahead with their as-of-right plan.

In retrospect, Kaliner said, “Who do I feel worse for? Not me. There is a group of people in that co-op that can truly not afford to have to pay for increases going forward.”

The board issued a statement regarding the vote, indicating they had planned financially for either outcome.

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

Sheila, who declined to give her last name, is a co-op resident on a fixed income. She said she currently pays just under $900 per month in maintenance fees. But according to what she has been told, she hears the fee go up more than $150 per month.

“There’s not just maintenance [fees] that I have to pay in my life,” she said. “There are other things I have to pay for.”

The developers had also offered four months of free maintenance to the shareholders as a part of the air-rights deal — a bonus that Sheila said would have helped her financial situation.

“I’m going to think of moving and going into a one-bedroom because I need the money,” she said. “I can’t give all this kind of money.”

Sheila, 78, and her husband, 80, have lived in the co-op for more than 50 years in a two-bedroom apartment where they raised their son and daughter. Decades later, when her adult children visit from California, they stay with her. Should she have to sell her co-op to downsize to a cheaper apartment, where her family stays when they visit her would be one inconvenience exacerbated by the final vote.

She said some neighbors voted ‘No’ because they feared the taller buildings would obstruct their views and block light. Another resident, Dan Strum, believes a better deal — particularly one with more community input — could be made with the developers. Also, a certain number of residents simply mistrust the board, in general.

Strum has been vehemently against the air-rights deal as it stood during last week’s vote. He manages a blog called The Seward Park Buzz about the co-op, which is independent of the co-op itself. Ahead of the vote, he wrote on the blog that he does not believe that this is a one-time opportunity, calling the developers’ stated plan to build as of right a “scare tactic.” Further, Strum believes the deal was not community-minded, despite the several months of discussions and the information provided to shareholders by the board.

“I understand that we have a neighbor who wants to buy air rights and that — financially — we really want to engage with them,” Strum said last Friday, ultimately pleased with how the vote turned out. He contended the co-op’s financial needs are overstated by the board. Though he couldn’t provide numbers to show that the financial needs were exaggerated, Strum said the board has previously said the co-op’s finances were “hunky-dory.” But when the developers stepped up to buy the air rights, Strum said the board flip-flopped and argued the co-op is cash strapped.

“I felt that the board was trying to sell it so hard,” Strum said. “I had distrust about the financial picture they were painting. I had misgivings that the community wasn’t a part of the process.

“If everyone came together, and it was a fantastic deal and the people who were most affected — their concerns were being addressed — I’d give it an enthusiastic thumbs-up,” Strum said. “Especially because, I don’t see [the new buildings] from my window. It wouldn’t affect me if it was three times as high.”

Another ‘No’ voter said deciding factors for her were the effects on people’s views, the sunlight their apartments would get, and how their privacy could be affected with the construction of the new buildings.

“I don’t think they really thought out or talked to people who live here about what they thought was a realistic concession, given that we are going to have these big buildings in our village, basically,” said Marion Riedel, a Columbia University social-work professor who has been living in the co-op for four years.

She felt the board could have been more transparent and that the air-rights sale was a short-term solution for the co-op’s financial troubles. Plus, the conversation was too focused on the finances, rather than the impacts the buildings are expected to have on the community, in her view.

“The lack of transparency,” Riedel added, “was one of the hardest things to manage and to accept.”

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