Click the link below the picture
.
Louis Grumet, who is a former state official and a former executive director of the New York State School Boards Association, bought a two-bedroom co-op in “the only reasonably priced place on 57th Street,” a white-brick building on the corner of the Avenue of the Americas.
That was in 2011, before luxury supertalls overwhelmed and overshadowed 57th Street, and it became known as Billionaires’ Row.
Now, a court ruling has Grumet worried. The decision, by Justice Nicholas Moyne in State Supreme Court in Manhattan, upheld a 450 percent increase in the rent that Grumet’s co-op pays the group that owns the land beneath the building. To cover the jump, he said he had been told, his monthly maintenance could skyrocket to more than $9,000 a month, from just over $3,700 now.
“Can we stay here?” asked Grumet, who uses a walker and whose wife navigates in a wheelchair. “I don’t know.”
The ruling involved a case brought by the landowner, which sought to confirm a three-person arbitration panel’s finding on the ground rent. The co-op had challenged the impartiality of the “umpire” on the panel, who was appointed to be neutral but did not disclose that the landowner’s lawyer had approached him about working on an unrelated project.
Justice Moyne said that “created the appearance of impropriety.” But he concluded that the co-op had not met “the very heavy burden of proof” required to show that the arbitration panel’s decision had been “prejudiced.”
Many co-ops own the land their buildings stand on. But the Ground Lease Co-op Coalition, a nonpartisan group of co-op owners, says that Carnegie House is the first of more than 12,000 ground lease co-ops potentially facing “land grabs from their landowners” because property values have surged since the first ground lease co-ops were formed, in the 1950s.
Richard Hirsch, the president of the Carnegie House co-op board, said the idea behind ground lease co-ops was “to allow middle-class people to live in the city.” By the coalition’s count, more than half of ground lease co-ops are in Brooklyn, the Bronx and Queens in areas where residents’ income is just under the citywide median of $79,000.
At Carnegie House, Hirsch said that prices of apartments in the building have plunged 90 percent since the dispute began and that banks would no longer write mortgages for prospective buyers.
‘An amount building residents simply cannot afford.’
Hirsch called the judge’s decision “a devastating blow.” He said the increase would bring the ground rent, now between $4 million and $5 million, to roughly $25 million a year, “an amount building residents simply cannot afford.”
“In the middle of a housing crisis, our billionaire landowners are pulling out all the stops to push out middle-class New Yorkers,” he said in a statement. He said in an interview that the co-op planned to appeal the ruling, which was first reported by The Wall Street Journal.
A spokesman for the group that owns the land under Carnegie House said that the co-op residents are responsible for only 65 percent of the rent. Some 25 percent of the total is paid by the owner of the stores on the ground floor, he said, and another 10 percent comes from the parking garage in the building.
The spokesman also said that more than 100 apartments in the building are owned “purely as speculative investments or second homes.” He said the group that owns the land was “prepared to work in good faith to reach a resolution and work with permanent residents demonstrating a need for rental assistance.”
Hirsch said that about 95 apartments belonged to residents who wanted pieds-à-terre, had retired, or had moved — but “the values have dropped so much that people can’t sell their apartments” if they wanted to.
.
Katherine Marks for The New York Times
.
.
Click the link below for the complete article:
.
__________________________________________
James' World 2 
Leave a comment