It’s not every day that the shareholders in a New York City co-op walk away from $54 million. But that’s precisely what shareholders in the 1,728-unit Seward Park Co-op on the Lower East Side did this week, Crain’s reports.
Ascend Group, which is building two condo towers on land adjacent to the co-op, offered $54 million for the co-op’s air rights, which would have allowed Ascend to build taller buildings. Of the 1,227 shareholders who voted, 690 voted to sell the air rights – well short of the required two-thirds super-majority.
The 11-member co-op board had unanimously supported the sale, saying it would help the co-op pay down debt, complete needed capital projects, and keep monthly maintenance payments low. Those arguments failed to sway shareholders, many of whom expressed anxiety that the taller towers would block sunlight and views, while increasing congestion, pollution, and noise.
"My wife and I loved this complex because it's open and has air and had a neighborhood feel and we saw that going away," said shareholder Bill Ferns, who, with his wife Marion Reidel, led the opposition forces. "The immediate benefit was lots of money. But once that was gone, we would be stuck with the downside forever."
Another shareholder, Lisa Kearns, told Habitat on the eve of the vote: “It really is a no-brainer. The amount of debt the co-op has already and that will only increase as capital improvements are made will mean continuous assessments and maintenance hikes. This huge cash influx will help Seward Park remain affordable for a wide variety of people and help maintain the diversity that many of us who live here value.”
"Obviously we're very surprised and we're disappointed," said Wayne Heicklen, a partner at the law firm of Pryor Cashman who represented Ascend in its effort to purchase the additional square footage. "We're lucky we still have a lovely piece of property at a low basis and an as-of-right plan that we're going to dust off. We're going to build."
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