The board at 200-unit Bay Terrace Co-op Section III has finalized purchase of its land-lease from Cord Meyer Development – becoming the last of the development’s nine co-ops to purchase the land its nine garden apartment buildings sit on. The purchase price was $6.7 million.
“For the co-op to own the land and not be subject to the land-lease has preserved all of our shareholders’ equity in their apartments,” says board president Patti Moloney. “We are thrilled to complete this.” She adds that the land-lease, which was set to terminate in 40 years and did not have a renewal option, was a “dark cloud” hanging over the co-op because it hampered apartment sales and prevented the co-op from refinancing its underlying mortgage. The darkest part of the cloud was the prospect that the shareholders could ultimately lose their homes when the lease expired.
The Section III land purchase is the final chapter in a saga that has unfolded over the past decade, with the co-op boards and their attorneys negotiating with Cord Meyer on a suitable way to end the fraught land-lease arrangement. City Council member Paul Vallone, whose district covers northeast Queens, was also active in the negotiations.
Attorney Geoffrey Mazel, a partner at Hankin & Mazel, represents Section III and four of the other Bay Terrace co-op boards. “I’ve been practicing law for 32 years,” Mazel says, “and this is one negotiation I’m very proud to be associated with – because if these sales didn’t happen, the apartments would start diminishing in value exponentially. Cord Meyer didn’t have to do this, but they came up with numbers that were reasonable for everybody. This has been very rewarding and satisfying.”
Meridian Capital brokered the refinancing of Section III’s underlying mortgage with Capital One Bank. The co-op is managed by Joseph Donofrio of Queens Quality Management.
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