Page 4 - New York Cooperator January 2020

4 THE COOPERATOR — JANUARY 2020 COOPERATOR.COM Monday, January 6, 2020 UHAB Introduction Workshop to Cooperative Homeownership Interference Archive, 314 7th Street, Brooklyn, NY 6:00 p.m. – 8:00 p.m. The Urban Homesteading Assistance Board’s (UHAB’s) Cooperative Homeownership Workshops are for people interested in learn- ing more about what it means to live in and purchase an affordable (or limited-equity) co-op apartment. Participating in this inter- active class will give you all the information you need about Housing Development Fund Corporation (HDFC) cooperatives—a unique type of affordable homeownership in NYC. This type of housing, designed for low- and moderate-income people, is also known as a limited-equity co-op, a shared-equity coopera- tive, and a limited-income co-op. Contact the UHAB at homeownership@uhab.org or (212) 479-3333 for more information. Thursday January 16, 2020 REBNY 124th Annual Banquet New York Hilton Midtown, 1335 6th Ave, New York, NY 6:30 p.m. – 10:00 p.m. Touted as ‘the biggest night in NYC real estate,’ REBNY’s Annual Banquet is New York City’s largest real estate networking event, providing a unique and invaluable opportunity to bump elbows with top owners, developers, brokers, and major city officials. Bringing together over 2,000 people from 250 companies, this event honors the city’s movers and shakers by presenting seven prestigious industry awards throughout the evening. REBNY’s 2020 honorees are Héctor Figueroa, David R. Greenbaum, Jodi Pulice, Jay Kriegel, Henry Celestino, Kevin R. Wang, and Robin Fisher. Tickets are $1,400. Email Banquet@rebny.com or call (212) 616-5285 to purchase or for fur- ther event information. Thursday, January 16, 2020 CNYC Workshop for Building Treasurers Location to be announced 7:00 p.m. – 9:00 p.m. Treasurers are responsible for all aspects of the financial health of their cooperatives and condominiums—all are potential discussion topics at the Treasurers’ Workshop. This is not a ‘how-to’ presentation, but rather an opportunity for treasurers to ‘talk shop’ with one another and to seek guidance from accountant Rick Montanye. Issues raised by participants set the agenda. Treasurers (and other board members) of CNYC member cooperatives and condomin- iums attend at no cost, as can treasurers from FNYHC, CCC, ARC, and UHAB, but advanced registration is required. Non-members are very welcome at a fee of $50, payable in advance. To pay at the door, preregister and add $15. Visit www.cnyc.com/ahc/cnyc_eventreg_welcome. CAL EN D AR Industry Pulse January Law & Legislation According to a recent piece in The Real Deal , strong legislative headwinds in Al- bany have made for tough sailing in the real estate community, for both commer- cial and residential players alike. Two pro- posed measures in particular—one deal- ing with developers’ response to natural disaster, and the other dealing with J-51 tax abatements—are of particular interest to the multifamily industry. The Mechanical Void Bill Superstorm Sandy swamped base- ments across the city and destroyed vital mechanical equipment, prompting devel- opers of new properties to position boil- ers, meters, and other HVAC equipment on higher floors. According to The Real Deal , “Some took that a step further, cre- ating mechanical floors with huge voids— raising the heights of apartments above so they could offer better views and com- mand higher prices.” State lawmakers have looked askance at the tactic, and in response have crafted a bill to crack down on the practice and bring buildings back into compliance with zoning restrictions. “Developers got wise to this and turned it into an oppor- tunity to build taller, but we’re wise to their trick,” said Assembly member Linda Rosenthal. “It’s a loophole they’re taking advantage of and the city \\\[government\\\] didn’t seem to care much.” The bill would impose a penalty on any residential space in excess of 12 feet high, cap mechanical floors at 20 feet, and cap mechanical deductions at 5 percent. The measure has already made it through committee and is expected to pass. The J-51 Tax Exemption According to The Real Deal , NYC De- partment of Housing Preservation and Development (HPD) commissioner Lou- ise Carroll announced this past fall that HPD was crafting a proposal to overhaul the J-51 program, which provides a tax exemption and abatement to multifam- ily properties that undertake significant renovations. Under J-51, a property’s taxes are as- sessed at its pre-renovation level for 14 to 34 years after major renovation work is completed—but according to HPD data, applications for J-51 declined 69 percent over the last decade because landlords and developers claim that the program’s requirement of re-regulating individual units makes filing for the abatement “not worth the trouble.” HPD’s plan for the next year is to pro- vide the state legislature with a proposal to “right-size” the J-51 program to make the benefits “more targeted and cost-effective” for owners. Kathryn Wylde, president of the trade association Partnership for New York City, said she hopes the program will be revised and resurrected—but that really, it should have been addressed be- fore now. “The logic \\\[of adjusting J-51\\\] is the real estate tax assessments have gone up on these buildings so much,” she said. “That conversation should have been ad- dressed last year as part of the formula to keep the buildings viable.” Appointments & Transitions Greenpoint Condo Chooses Mackoul for Insurance Effective July 14, 2019, Mackoul Risk Solutions was chosen as the new insurance broker for 50 Greenpoint Condominium. Built in 2016, the modern 44-unit build- ing is located near the edge of the East River waterfront, and just a few blocks from Greenpoint’s main shopping area and minutes from Manhattan, Williams- burg, and Long Island City. The building offers a double-height attended lobby, a comfortable lounge with fireplace, a chil- dren’s playroom, a fitness center, a land- scaped roof deck with dining, and private parking. According to a company spokesper- son, “Mackoul is extremely pleased to be chosen as the insurance broker for 50 Greenpoint Avenue, and we look forward to working with the board and continu- ing a successful working relationship with Choice New York Management, one of New York’s premier property manage- ment firms. Mackoul Risk Solutions is an insurance agency in Manhattan, New Jer- sey, and Long Island that specializes in co- op and condominium insurance.” Buying & Selling Condo Glut Boosts Developer’s Lending Biz According to a recent piece on Bloom- bergquint.com, NYC’s less-robust- than-usual luxury condo market has an upside—at least for one prominent devel- oper. Michael May, president of Silverstein Capital Partners, is looking to double his firm’s lending business to more than $1 billion in 2020, and is “eyeing so-called inventory loans in Manhattan neighbor- hoods like Gramercy, TriBeCa, and Mid- town East.” According to the article, inventory loans “are often used to provide a tem- porary lifeline for developers to pay off construction debt without having to slash prices as they ride out slow sales. The money can also allow builders to take eq- uity out of projects earlier. Extell Devel- opment Co. recently secured this type of loan on its One Manhattan Square proj- ect, using the unsold condos in the 815- unit tower as collateral.” Silverstein Capital Partners is the lend- ing unit of Silverstein Properties, and was formed in the fall of 2019 to capitalize on banks’ reluctance to fund major de- velopment projects in a slowing market. The unit’s first funding project was $240 million in mezzanine financing for JDS Development Group’s 9 DeKalb Avenue tower in Brooklyn. Since then, the unit has completed some $500 million in ad- ditional financing—including a project in LA—and has its sights set on the Bay Area and Seattle markets as well. “You’re seeing some projects that are completed that have just had very, very slow sales,” May said. “Our goal is not to lend to projects that fail: We’re in a posi- tion where if a project has a problem, we believe that we could execute the business plan and we could finish the construction. Given the amount of condo developers seeking debt, if we open the floodgates, we could probably load $1 billion of that product on within the next 60 days.” TriBeCa Loses ‘Most Expensive Neigh- borhood’ Spot According to a recent report from Property Shark, TriBeCa has—at least for now—lost its status as the most expensive neighborhood in NYC. Hudson Yards now holds the crown, with a dizzying median sales price of $4.9 million in Q3. Compared to that, TriBeCa’s median was a paltry $2.3 million—a 30% decline year- over-year. The quarter-over-quarter drop was even more precipitous, according to the report; the downtown land of lofts and luxury tumbled from $4.3 million in Q2—a whopping 45% decline. According to the report, “Other Man- hattan neighborhoods within the top 10 ‘most expensive’ list include Hudson Square at $2.3 million, $2.1 million in Lit- tle Italy, SoHo at $2 million and Flatiron at $1.4 million.” Also worth mentioning is the Lower East Side’s meteoric 87% rise to median sales price of nearly $1.5 million. Prices Drop All Over East Midtown According to a November report by RealtyHop.com, Turtle Bay/East Midtown in Manhattan saw the highest number of price drops across all NYC neighbor- hoods this past fall. According to the re- port, Turtle Bay/East Midtown saw 245 sellers scale back their asking prices in October—followed closely by the Upper East Side/Carnegie Hill, with 225 price drops that same month. Even the Hudson Yards juggernaut and the coveted West Village weren’t immune to downward ad- 2020 PULSE/CALENDAR continued on page 14