Friday, February 23, 2007
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This blog is for owners or people who'd like to be owners at the Belltel Lofts at 365 Bridge Street Downtown Brooklyn. Also, anyone wanting to discuss Downtown Brooklyn in general.
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2007
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February
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- Clipper Equity, buyer of Starret City is also owne...
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Belltellofts Official Website
19 comments:
Anonymous said...
[EJ]: I never noticed this before, but the developer (and through Metrotech I, LLC, the indirect owner/sponsor) of BellTel is Clipper Equity, which has been in the news a lot recently, due to the Starrett City purchase situation (they're the putative buyer).
That might be a problem for some folks; in and of itself, it doesn't especially bother me - at least for the time being, they claim they can keep the housing there affordable. One thing that makes me wonder, though, are some of the things coming out about Clipper Equity. For example, CE currently has a portfolio of 4,768 apartments in 71 buildings - and also has 8,792 outstanding maintenance code violations amongst these properties (according to the New York City Department of Housing Preservation and Development). That's nearly 2 violations per apartment unit (or 115 violations per building).
(here's my source for these numbers: http://therealestate.observer.com/2007/02/schumer-to-new-starrett-owners-keep-it-affordable-or-else.html)
Food for thought. What do people think about this?
February 23, 2007 1:40 PM
guyfromdobro said...
It's funny that you're bringing this to my attention because I was just reading the same article about 10 min ago and debateing on whether I thought it was important enough. I don't really care much for what they end up doing Starret City. I understand it's big news these days but I'm not sure that it makes much of a difference to Belltel. I'm only really concerned with our DOB violations. With that being said, a lot of the violations that builders and developers have are small and can be addressed pretty quickly. Now, major violations that could halt work on a project are most definetly a concern of mine.
Ultimately, I feel one project has nothing to do with the other.
I'll create a seperate post to continue this thread.
February 23, 2007 2:04 PM
EJ
Thanks for the heads up.
[EJ]: Ha! Funny timing.
I tend to agree that Starrett City and BellTel are different and that the issues there are not ones to be particularly worried about here. That said, continued digging has surfaced reports of some more iffy things:
http://www.oag.state.ny.us/press/2007/feb/feb16a_07.html
Specifically, these passages caught my attention:
"Since 1998, Bistricer has been under permanent injunction from the offer and sale of cooperative buildings and apartments. The order, signed by New York Supreme Court Justice Diane Lebedeff, stemmed from a finding of a pattern of abuse and deception by Bistricer in prior cooperative apartment conversions and sales."
To be balanced, Bistricer's lawyers dispute Cuomo's interpretation of the terms of the injunction. As for the large number of outstanding maintenance violations, they claim that the violations preexisted the (relatively recent) purchase of a property in Flatbush and that thus they were passed on to them by the previous owner.
-----
I'm not trying to scare people off... it's just wise to be as informed as possible about what's involved with the purchase. Personally, I have some concerns, but I think that as long as people keep a close watch on things as they develop, everything should be ok. That said, I am going to try to get my hands on the 1998 court order and see what it actually says...
It also should be noted that the judge who handed down the purported injunction has been censured for misconduct on at least two occasions. Not trying to suggest that anything was improper on the court's part in the Bistricer matter, of course... but it adds some color to the proceedings.
ej
Not to down play any of the stuff your talking about but a lot of this sounds like standard operating procedures for a gigantic equities company. If you spent enough time digging with any Equites company, I imagine that you would find plenty of things worth talking about. That's not to say that I'm not interested in anything that come up with on Clipper. I'm still curious to know. I just think that at the end of the day, Belltel will be just fine.
[EJ]: Not sure it's standard operating proceedure to be denied the ability to ever sell a co-op again by the courts, but I take your broader point and agree. Belltel will be fine.
Luckily, I'm fortunate enough to know the former Attorney General who brought the court action against Bistricer (Bob Abrams*), so can get the straight dope next week.
*(hoping this doesn't reveal too much personal info!)
So, you know the former attorney general. I guess it doesn't get any closer to the horse's mouth than that. Let's keep as positive as we can. I think we have a vested interest in seeing things go smoothly.
Happy hunting.
Does anyone know if there will be any storage in the building at no fee? For example I have bicycles and trunks that are currently stored by my building and have no idea if or where it could fit in the apartemnt.
Regarding the J-51 according to the sales people, the abatement only kicks in after the building has totally been completed which is not expected until the end of the year. Only then does the application go through and it will take a couple of months to become active. So if you are in first phase, you will only get the abatement most likely nine months to a year. So until then you will be paying the full amount. Does that sound right?
I believe you're essentially right about the J-51: you can't apply for it until you have "completed work,"s o there will be no abatement until the whole building is complete.
So assuming the building is finished in December, it won't kick in until, say, February of 2008.. and then we'll be set for the length of the abatement (either 10 years full abatement with 4 year phase-out or 30 years full abatement with 4 years phase out. I suspect BellTel will be the 10+4, because the 30+4 is generally granted to "affordable housing projects."
http://www.nyc.gov/html/hpd/html/developers/j51.shtml
On your other point, I don't think there will be free in-building storage. They certainly haven't advertised it as a selling point, and nothing is delineated for it in the floorplans of the building. There is one storage unit on one of the upper floors, but that has to be bought (asking price $60K).
I believe we are a 10+4 J-51. RE: storage. None to my knowledge. I'm going to have the same problem with my bike. I'll probably put it on the ceiling of the home office. As far as other storage, I'm considering custom cabinetry in different parts of the apartment close to the ceiling. This way I won't lose any floor space.
I spoke to one of the brokers this weekend, and asked about the sapce created by pulling out the second set of elevators. No decisions have apparently been made as to what will become of that space, although there are two options being considered.
One is that it will be converted to professional space, either for external people to rent or for tenants/owners to rent as they will be fairly small.
The second alternative was to convert it to storage units, but undecided as yet whether it will accompany the apartment or will have an additional charge.
[EJ]: If you're talking about the area I think you are, it is currently marked as "professional space" in the Plan right now on each of the floors that has it (4-16). It'd be great if they made that storage space!
To be frank, I think its a better use of the space, anyway... I don't think they'd fetch much interest in the units as professional space.
I would love to see it become storage space. I need a place to keep my bike.
[EJ]: Got some answers regarding the Bistricer/Co-op situation.
I don't think BellTel buyers have anything to worry about.
What happened (what was he accused of and/or what did he do)? I'm not keen to get into that here just because I don't think it matters to BellTel buyers. If people really want to know, they can go to the courthouse and pull the file.
EJ
Thank you very much. My mind is completly at ease, now that you have completed you investigation. Feel free to e mail me any info that you choose not to display on the blog.
streetshooter1@gmail.com
I'd like to know the details about this if anyone has the info.
I'd like to know the details about this if anyone has the info.
It's publicly available if you're willing to go to the courthouse.
Wall Street Journal
Starrett City Blues
By JULIA VITULLO-MARTIN
March 10, 2007; Page A8
NEW YORK -- When Housing and Urban Development secretary Alphonso Jackson last week rebuffed the proposed $1.3 billion sale of Brooklyn's Starrett City -- the largest federally subsidized rental project in the nation -- advocates cheered and New York officials announced that justice had prevailed. But had it?
One of the most intractable problems since the Great Depression has been the ever more expensive but still poor quality housing of low- and moderate-income households. Nearly all policy experts agree that urban public housing (financed, operated, and owned by the government) has been a disaster in all but a very few jurisdictions. Yet the alternative -- housing financed by government but owned and operated by private investors -- is far from a triumph, despite billions of dollars spent by taxpayers.
Thus it's ironic that the sale of one of the few clear successes -- Starrett City -- is now mired in bitter controversy and recriminations. "This transaction threatens New York City's low-income housing market and those who most need it," said Mr. Jackson. "The Starrett City sale would quickly displace most, if not all, of the 14,000 residents here."
In fact, it would do no such thing. Nor would it produce, in Mr. Jackson's inflamed rhetoric, "a human tragedy" or "the destruction of one of the safest, most friendly communities in New York City."
What this hubbub should produce is something far more staid: a serious analysis by HUD of its own review procedures, which are virtually non-existent, for transferring publicly financed property from one private owner to another. It's not that the sale is necessarily right; but HUD has no standards for judging, as the tens of thousands of defaults on HUD property over the years attest.
Built on landfill and opened in 1974 in the declining neighborhood of East New York, Starrett City was initially conceived as a state-financed co-op for union workers. But many of those with money moved to the suburbs, forcing Starrett's developers to market their 5,881 apartments on 140-plus acres as rentals -- to the chagrin of home-owning neighbors who feared an infusion of impoverished, irresponsible households. Instead, Starrett managers chose tenants carefully, maintained the grounds beautifully, added amenities like landscaping, garages, retail stores and recreation areas, and ended up with a stable, fully occupied project.
Benefiting from tax abatements, low-interest government loans and rental subsidies, Starrett became highly lucrative. "This was the most profitable tax shelter in American history," says Robert C. Rosenberg, who as president of Grenadier Realty managed Starrett for most of its history.
In November 2006 the owners, led by investor Disque Dean, signaled their intent to put their valuable property up for sale. At this point they made a political error: They decided on a two-step process that withheld information from government officials on the initial bids. Officials say they were assured that they would be consulted before a buyer was chosen.
Instead, when the buyer was announced on Feb. 8, officials felt they were sandbagged, left uninformed and unprepared. No official -- and indeed, no private developer -- came forward to speak well of the new buyers, Clipper Equity, a partnership led by David Bistricer and Sam Levinson, relative unknowns in the clubby world of New York real estate. What was known -- and immediately deplored in the press -- was that the buyers owned a once notorious government-financed project, Vanderveer Estates in Brooklyn, 59 apartment buildings clustered on five blocks not far inland from Starrett.
A textbook example of failed government projects, Vanderveer had gone through several owners before being bought by Clipper in 2004 and renamed Flatbush Gardens. It carried close to 9,000 violations at the time of the sale. But Clipper says that 83% of those violations have been corrected, adding that it has put in just under $8 million in capital improvements.
So: Are Clipper's investors really slumlords who are going to exploit Flatbush Gardens even further, siphoning off ever increasing rents, while letting the property deteriorate, before flipping it profitably to someone else? "We're not flippers," says J. J. Bistricer, Flatbush Gardens' leasing manager and grandson of David Bistricer. "We buy undervalued property. We fix it up and keep it affordable for working-class people. We haven't flipped a project yet." He notes that his grandfather has been in business since 1952.
Certainly Flatbush Gardens today is a far cry from the scary, drug-infested, vandalized Vanderveer Estates. Front doors then hung off the hinges. Human feces were common on the grounds. Drug dealers operated fearlessly. According to Flatbush Gardens security director Jesse Gonzalez, a former NYPD detective, 40% of the crime in Brooklyn's 67th precinct had been attributable to Flatbush Gardens in 2001. In 2006, crime in Flatbush Gardens was almost negligible: no rapes, no grand larceny auto, no grand larceny -- but one felonious assault and 20 burglaries.
On its face, Flatbush Gardens looks like it's being converted from a reviled slum to reasonably maintained affordable housing. But is that enough of a credential for buying the far more complex Starrett City? Not clear.
What is clear is that government has no sound criteria for determining in advance whether these -- or any other -- buyers are suitable. "I would be thrilled," says former New York City housing commissioner Jerilyn Perrine, now executive director of the Citizens Housing and Planning Council, "if the secretary's position were signaling a change in HUD's own policy, announcing that they are going to set up a standard set of criteria to make sure projects go to good and competent landlords who can match their sales price with an infusion of capital."
Right now it's a hit-or-miss game, with local elected officials and activists, following the by-now standard script for urban political theater, howling down any substantive discussion of the buyers' qualifications. This bodes badly for future transactions in New York -- and for the thousands of HUD-financed projects across the country.
Julia Vitullo-Martin is a senior fellow at the Manhattan Institute.
[EJ]: Excellent article.
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