Author Archives: Micah

A few air rights fact-checks – Round 2

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Advocate both for and against the air rights deal have been working overtime to generate fliers.

Here are some corrections to a few of the more misleading statements we’ve seen.  There will likely be more to come.

"It's the total mass" flierThis flier is mostly accurate. We tend to agree that one 28-story building is the most likely as-of-right alternative to the deal. But the flier places the 28-story building on the wrong lot. Due to “setback” requirements, we do not believe it is possible to build 28 stories on the corner lot (even the “with air rights” plans don’t call for a 28 story building on that lot).  Perhaps not coincidentally, a 28-story building on the correct lot would cast a shadow with almost exactly the same impact on Rainbow Park as the “with air rights” scenario.
"2 buildings no matter what"This flier has a few issues (common to most of its numerous cousins as well):

  • As was pointed out by an opposition flier, the scale of the two photos is different.
  • The statement that two buildings are happening “no matter what” is inaccurate.  It’s a possible scenario, but we believe the single 28-story tower on the eastern lot to be the most likely as-of-right scenario (which, ironically, would make the impact of the YES vs. NO scenarios less disparate).
  • The $53 million figure is pre-tax, so the co-op won’t actually benefit to the tune of $53 million (we believe the $39 million after-tax estimate is more meaningful).
"37' from building 2"In no circumstance will the air rights towers be 37′ from building 2.  The shortest distance from the corner of building 2 to the Bialystoker lot line is about 60′.  The new buildings won’t be any closer to the F section (and only 12 feet closer to the C section) than the old East Broadway Medical Associates building.  The shortest distance between an F section window and the new buildings will be about 20% farther than the distance between the F section and the E section.
 "questions and some answers"This is the most egregiously misleading flier we have seen so far.  It incorrectly states that we will “permanently give up our access to a strip of our open space,” that we wont’ know how big they can build if say YES until after the deal is done, and that a successor owner would not be legally bound to abide by our contract if Ascend sells to someone else.

2018 Seward Spark Board Endorsements

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This year’s Seward Spark endorsements again come from Micah Arbisser, who publishes the Seward Spark, and Kate Nammacher, who recently served on the Board as a director, president, and treasurer.

After reviewing the candidates’ biographies, hearing their presentations at Meet the Candidates, and reviewing the records of those who have already served, we believe the following four candidates stand out for their high levels of engagement, knowledge, optimism, and professionalism.

#1 Aaron Fineman, #4 Doron Stember, and #6 Erica Cullmann – The incumbents this year are among the most hard-working, thoughtful, effective directors in the co-op’s recent memory.  They absolutely deserve reelection. Erica, Doron, and Aaron have led us through a challenging period where they raised revenue from non shareholder sources, overhauled our budgeting process to make it more stable, expanded access to amenities, and were responsive to shareholder concerns and alternative Boardroom viewpoints.  They also toiled for 17 months to bring the best possible air rights deal to a shareholder vote, while presenting detailed and balanced information about the deal.

#2 Sidney Goudie – From Sid’s first days in Seward Park, he has demonstrated a deep commitment to our community.  Sid is well known for his friendly presence in the E section, and can often be found engaging neighbors with questions about our collective home in an effort to understand the issues from all perspectives.  He is someone who can naturally find common ground on the most pressing matters facing our co-op. Sid also has a strong finance background and focuses on long-term preservation of capital. He wants to apply his financial expertise to the co-op’s budgeting and fiscal management strategies and would be an extremely valuable Board member.

Whether or not you agree that these candidates are the best, please exercise your shareholder right to vote!

Your neighbors,

Micah Arbisser
Seward Spark Publisher

Kate Nammacher
Former SPC Director, President and Treasurer

Breaking: Air Rights Sale to be on June 2018 Ballot

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Today the co-op circulated the official announcement of the air rights sale by e-mail.  Since the last communications, there have been two key changes:

  1. The sale price was increased by over $5MM, which has been ear-marked for a 4-month total maintenance holiday for shareholders.
  2. The Board has decided to unanimously endorse a YES vote on the referendum.

We will have further analysis and opinions on the sale in the coming days…

Liquor Store Update

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Following up on our prior post about the State Liquor Authority denying Seward Park Liquors’ request to move their license to Ludlow Street, we have confirmed that there was in fact an outstanding violation for selling to minors.  That violation appears to have been resolved on January 28, when Seward Park Liquors paid a $6,500 fine (see page 63 of this document).

According the SLA’s website, on January 24 both VinFamily (the would-be new liquor store) resubmitted their application for a new license at 393 Grand, and Seward Park Liquors resubmitted their “removal” (i.e. new location) application.  Both applications are scheduled to be reviewed by the full SLA board on April 4.

Seward Park Liquors denied license at new location

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Former SPC commercial tenant Seward Park Liquors will not be re-opening on Ludlow Street any time soon.

After our Board decided not to renew their long-time lease at 393 Grand Street, Seward Park Liquors announced they would relocate to Ludlow Street this month.  But the NY State Liquor Authority website now says that a “disapproval letter” was issued on January 8, 2018, with respect to the store’s application to move their license to the new location.

Our sources tell us that the disapproval was related to recent violations for selling to minors.  Those same violations supposedly caused the SLA to deny a license to the would-be replacement tenant for the 393 Grand storefront last fall.  We understand the new tenant is appealing the decision.

Referee issues decision on garage lawsuit fees and costs

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When the court dismissed the garage lawsuit last summer, the judge ordered that the plaintiffs pay reasonable fees and costs incurred by the co-op in defending the suit.  Over the next few months the parties submitted arguments to a referee regarding how much the plaintiffs should have to pay.

On December 22, the referee recommended that the court award the co-op $161,088.72 in fees and costs.  We assume the court will adopt this recommendation.

It is not yet clear to us, however, how the amount already paid by one of the five plaintiffs (who settled with the co-op a few months ago for his share of the fees that were accrued at that time) will factor into this, or whether the co-op will receive any discount from our lawyers for the portion of the fees and expenses billed that the referee decided were not “reasonable” (although the lawyers are certain to disagree with that decision).

Regardless, it is highly likely that each of the remaining four plaintiffs is likely to have an extra $40k (give or take) line item on their maintenance bill in the near future, which should serve as a cautionary tale to any other shareholder who is considering suing the co-op without a really solid case.

A few air rights fact-checks

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Opponents of the air rights deal have been busy mailing, hand-delivering, and e-mailing materials to shareholders and updating their website.  We thought it was worthwhile to take a look at a few of their claims:

  • “The developer can only build 71,000 sq ft as-of-right, but, if we sell our air rights, will build a massive structure that’s more than 3 times bigger.”  True.  The developers talk about the deal as a question of 115,000 sq ft as-of-right vs. 277,000 sq ft with air rights, because that’s the floor area that they’ll have to sell post-development.  But the 44,000 sq ft landmarked Bialystoker home isn’t going anywhere, so from our perspective, it’s really a choice between whether the developers can build new buildings totaling 71,000 sq ft or 233,000 sq ft.
  • “The co-op will net about $26 million after tax.”  Probably true.  We have not yet seen the tax analysis that the Board has commissioned, but expect it to be in the ballpark of $25-30 million after tax.
  • “The deal can pass with 365 (or fewer) yes votes.”  Theoretically true but misleading and irrelevant.  The bylaws require 2/3 of those participating in the vote to say “yes” in order for it to pass.  While in theory it could pass with only 365 “yes” votes, that would mean only 547 shareholders turned out to vote, and we expect turnout to be very high.
  • “Shorter buildings with more floor space are more likely [if the deal fails than the 20 and 17 story buildings Ascend says it is ‘considering’].”  Maybe true.  The deal opponents are correct that 71,000 square feet spread among 37 newly built stories would yield very skinny towers with a high proportion of square feet dedicated to unsellable elevators and stairwells.  But higher floor apartments also command somewhat higher prices per square foot, and the footprint of what the developers can build as-of-right may be limited by zoning requirements for setbacks and rear yards (we don’t know enough about those requirements to offer an opinion).  So we have no way of knowing for sure what the as-of-right alternative to an air rights deal would look like.
  • “This sale is not the last chance for the coop to monetize its assets.”  Sort of true. The developers were engaging in some misleading hyperbole of their own when they said in their first big flier that they are our only potential buyer and this is our only chance to sell. It’s true that if we reject the deal, then the developers (or a new developer who might take over the project) could come back with a better offer.  And it’s true that our air rights can be used to build something on our own property.  But the deal opponents overstate their case almost as badly as the developers.  If the shareholders reject the deal by a large margin, it’s equally possible that whoever ends up with the project would decide it’s not worth spending more money to try to do a deal with us, and would forge ahead with whatever they can build as-of-right.  And if they build as-of-right, the only way we can use our air rights (absent the City Council changing the rules) will be to build on our own property.

Overall, we’d rate this first flurry of materials (excluding some of the anonymous mailings) from the opponent group as “not terribly misleading.”  In the stuff they’ve put their names on, they’ve made some good and important points, called out the developers where the developers edged into misleading territory, and mostly (but not entirely) refrained from going into misleading or disingenuous territory themselves.  Some of the anonymous communications have been far less responsible, and we urge readers to ignore anonymous materials and focus on the ones that are attributed to specific individuals or groups.

It bears repeating, however, that shareholders will not be deciding whether they want a 71,000 or 233,000 square foot development next door, but whether we think the downsides of a 233,000 square foot development (and there are definitely downsides) are worth accepting in exchange for the developers putting tens of millions of dollars in our cooperative coffers.