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Seward Park Co-op to Vote on $48.6 Million Windfall

Lower East Side, Manhattan

Seward Park Air Rights

This office building is being dismantled to make way for a new development abutting Seward Park co-op (image via Google Maps)

Nov. 2, 2017

Shareholders in the 1,728-unit Seward Park Co-op on the Lower East Side will soon be voting on the latest in a long string of contentious issues: should the co-op accept a $48.6 million windfall for its air rights so developers can build a large residential project alongside the property? 

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, the Lo-Down reports, and the Seward Park co-op board last week approved a letter of intent that spells out terms of a potential sale. The deal will go through only if two-thirds of the shareholders participating in a referendum vote in favor. No date for a vote has been set. 

At stake is the future of two parcels the developers own on either side of the shuttered Bialystoker Nursing Home at 228 East Broadway, which is a landmarked building. Earlier this year, the developers said they would build on the easternmost parcel, with or without the co-op’s air rights. They envisioned a 31-story tower if the co-op agrees to sell its development rights. 

The developers are also offering to reimburse the co-op for costs associated with the transaction. According to a memo sent to shareholders last week, the co-op board has hired a firm called NYC Meeting Facilitators to conduct “a robust process to engage shareholders” about the potential sale. Once the co-op’s tax specialist calculates the net proceeds from the proposed sale, residents will discuss how the co-op would use the profits. 

The co-op has a history of conflict, including contested board elections, a bitter fight over leaving the affordable Mitchell-Lama program and going to market-rate sales, and, more recently, a contentious decision by the board to bring in a garage company to run the co-op’s parking operation. That last decision sparked an unsuccessful lawsuit by disgruntled shareholders.

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