National News

A $54 Million Offer to Build Oversize Towers Divides Seward Park

Posted June 10, 2018 5:56 p.m. EDT

NEW YORK — On the Lower East Side, $54 million looks a lot like a windfall in this once-teeming home to immigrant workers now firmly in the path of glass-tower development.

But a developer’s offer to buy the unused development rights from the Seward Park Cooperative has disrupted the leafy quiet of the four-building brick complex, pitting neighbor against neighbor.

The developer, Ascend Group, hopes to use the purchased air rights to build two condominium towers at heights taller than would ordinarily be allowed by zoning laws — 22 stories and 33 stories — at the edge of the cooperative, at East Broadway and Clinton Street.

Some Seward Park residents see the money as a welcome relief that would allow them to pay down the co-op’s mortgage, make long-deferred repairs and reduce maintenance costs.

Other residents, like Judy Prigal, 82, a retired teacher who grew up in Seward Park, opposes the deal. She contends that Ascend’s oversize towers will cast shadows across the complex’s green lawns, block views and accelerate the gentrification of the Lower East Side.

Residents may not be able to stem the surging tide of luxurious buildings elsewhere, Prigal said, but “we have control over this one spot. Putting up a humongous building will start to obliterate the East Broadway side of Seward Park.”

With the shareholders scheduled to vote Tuesday on whether to accept or reject the $54 million offer, residents said the debate has gotten heated, with flyers and emails from both sides setting off arguments. Opponents have set up card tables in the lobbies at Seward Park, next to posters that outline the benefits of the deal.

Late last week, the developers threw in an additional $1 million sweetener if the deal is approved, on top of a recent pledge to pay the maintenance fees for all residents for four months.

But if that was a carrot, the developer also showed that it wields a stick: It said it intends to build two towers, albeit smaller ones at 17 and 20 stories, on lots it owns next to Seward Park, even if it does not win the air rights.

“They’re not stopping our development,” said Wayne Heicklen of the Ascend Group. “We are building one way or another.”

With that in mind, Doron Stember, president of the co-op board and a urologist, made his case for the sale.

“If we sell the air rights, the co-op will end up with about $54 million and larger buildings next door,” Stember said. “If we don’t sell the air rights, there will still be dense construction but no revenue for the co-op.” The Lower East Side is not a stranger to development. Remnants of the old neighborhood — the tenements, bodegas and bakeries, the building that once held Bialystoker Center & Home for the Aged, Kossar’s Bagels and Bialys, Ming’s Caffe, 169 Bar, the Sweet Life candy store — sit alongside newcomers: the condo towers; Ice & Vice, a store serving craft ice cream; and Malt & Mold, which offers cheeses and craft beer.

The 10-story beaux-arts home of the Jewish newspaper The Forward, with its reliefs of Karl Marx and Frederick Engels, has been converted to condos on East Broadway.

Seward Park, which sits on a triangular 13-acre site between Grand Street and East Broadway, is one of four sister complexes on the Lower East Side that were built in the late 1950s by the garment workers unions as limited equity cooperatives.

The four 21-story buildings comprising Seward Park were designed by Herman Jessor with the idea that laborers were entitled to airy apartments, eat-in kitchens, balconies, grass lawns, landscaped hedges and doormen.

Prigal, whose parents were among the original tenants, recalls the complex as an idyllic place: Most of the residents were Jewish, but the neighborhood was a mix of Latinos, Italians and African-Americans.

“It was just a wonderful place,” she said. “The price of the apartments was reasonable. They were clean, new apartments loaded with young families and children.”

By the 1970s, the neighborhood was plagued by drugs and crime. Prigal later moved to the Upper West Side, before coming back to Seward Park eight years ago when she retired.

After a stormy debate in the 1990s, the shareholders voted to allow their apartments to be sold on the open market.

“It was as big a controversy then as the air rights are now,” Prigal said.

Before that, outgoing residents had to sell their apartments back to the co-op for about the original price. The co-op in turn would resell the unit for a similar sum, ensuring that the complex remained affordable to working- and lower-middle-class residents.

Residents who sell their apartments today are assessed a “flip tax” by the co-op of either 17.5 percent or 5 percent, depending on whether the unit is changing hands for the first time since the conversion in 1995.

Over time, the number of apartments has fallen to about 1,602 from 1,728 as residents combined units. The apartments sell for as much as $1.1 million.

Heicklen said he and his business partner at Ascend, Robert Kaliner, were attracted to the Lower East Side because it was “an emerging neighborhood” that evoked a “lot of nostalgia” of a bygone era in New York.

They bought three parcels on East Broadway in 2016, knowing that they might be able to buy the unused development rights, or air rights, from the co-op, enabling the developers to build taller towers with a total of about 200 condominiums. The two towers would be erected on either side of the former Bialystoker nursing home, a landmark that will become a lobby for the towers.

The developers anticipate that about three-quarters of the condos would sell for less than $2.5 million.

“One of the great things about the neighborhood is that it’s filled with a very diverse group of people, every religion, every nationality,” Heicklen said. The co-op board began negotiating with the developers 17 months ago, with the price eventually rising to $54 million ($39 million after taxes) from over $40 million. Since then, the board has held more than a dozen informational meetings for tenants.

Based on a survey of residents, Stember, the board president, said a portion of the proceeds would be used to pay down the complex’s debt, with another $12 million set aside for replacing elevators, repairing terraces and doing facade work.

He said that if the co-op does not take the money, shareholders will face increased maintenance and assessment fees, which will accelerate the departure of lower-income residents and older residents living on fixed incomes.

Dana Linett-Silver, who has lived at Seward Park since 1999 with her husband and three children, said the proposal “makes financial sense.”

But Jerilea Zempel, a retired college professor whose views will not be affected by the project, describes the developer’s proposed luxury towers as “big and grotesque” hulks that will probably “reverse” the diversity of the neighborhood.

Leslie Levinson Chu complained that the views from her first-floor apartment would be blocked by the planned towers a couple dozen feet from her windows.

Other critics said the benefits of the deal will be fleeting. The co-op will survive, as it has for the last 60 years. They say the co-op could instead increase rents for the storefronts it owns and fees for the garage.

Marion Riedel, a professor of social work at Columbia University, described the developer’s incentives as “bribes.”

“I love Seward Park,” she said, “but I don’t like the overdevelopment of the Lower East Side.”

The developers have vowed to build no matter what happens Tuesday. But if shareholders reject their offer, they may also renege on their promises to avoid construction work on Saturdays and to start any pile-driving or loud work after 8 a.m.

“If we don’t buy the air rights,” Heicklen said, “we won’t be bound by some of the concessions we made.”