Wednesday, December 16, 2009

SoHo Real Estate

Patriotism is often an arbitrary veneration of real estate above principles.
-- George Jean Nathan (1882 - 1958)

The pace of construction has slowed Downtown. The new projects that are moving forward are primarily hotels. In part, this is due to the fact that little community review is needed when building as-of-right structures in a manufacturing zone. The Trump SoHo project is nearly completed and both the Tunnel Garage and Moondance Diner sites are in final stages of construction.

Tunnel Garage Condo

Moondance Hotel

The condo project at 350 West Broadway is also nearly completed.

Rumors abound as to the success of any of these projects due to the dearth of financing for construction. In the case of Trump SoHo, 350 West Broadway and the Tunnel Garage condo development – the truth about sales is hard to come by. The fact that there is a vacant lot for rent at 100 Varick Street where an eight story rental building had been approved – followed by rumors of yet another hotel – tells the story of commercial real estate and development.

For tenants, the Stuyvesant Town decision at the Court of Appeals is the big story. Tishman-Speyer gambled and lost. Why any company would believe that thousands of rent-stabilized tenants could be forced out of their homes is a serious misunderstanding of a city that is built on landlord-tenant litigation.
Essentially, those landlords who benefitted from J-51 tax abatements are now precluded from using the luxury decontrol option to force stabilized tenants from their homes.
This was a ploy used by many aggressive operators to force tenants out of their homes.
In one case, two real estate newcomers who are also dentists at a Varick Street location in SoHo (actually Hudson Square) have been using this method for many years. Among the many other dubious methods to harass stabilized tenants out of their homes luxury decontrol has been the choice of these characters – with the willing cooperation afforded by DHCR and Department of Buildings. These denuded agencies allow illegally operated buildings to use the courts in furthering landlord plans. The Mayor has intentionally weakened both of these agencies in order to evict legal tenants and further development in Manhattan.
Recent laws regarding harassment and abuse are seldom enforced requiring huge legal fees to be paid by tenants. The $5,000 fines for such behavior enacted by the City Council is not only a joke, but is rarely imposed. In reality, tenant protection is a figment of the City Council’s imagination, in spite of the laudable efforts by Speaker Quinn. If you, as a tenant, pay legal fees and cannot pay rent at the same time – you lose one way or the other.

The Court of Appeals ruling, however, recently eliminated luxury decontrol in any building that was afforded J-51 tax relief for the landlord. Further, current market rate tenants who live in apartments, which formerly were stabilized – and were previously converted to market rate – may now be restored to stabilization. This is true regardless of whether the current market rate tenant occupied the apartment at the time it was converted from a stabilized status. In addition, any rent paid which was higher than what was once the registered stabilized rent – can be retrieved from the landlord (with treble damages) by the tenant.

Wednesday, December 02, 2009

Political Lessons

Times have changed. It's not like the Old Days, when we can do anything we want. A refusal is not the act of a friend. If Don Corleone had all the judges, and the politicians in New York, then he must share them, or let us others use them. He must let us draw the water from the well. Certainly he can present a bill for such services; after all... we are not Communists.
-- Don Barzini (The Godfather)

With Goldman Sachs bankers reportedly applying for gun permits to protect themselves from an enraged populace, its not surprising that there is some anger associated with playing the game of politics. As JFK once said, “Politics is the only game for adults.”
The game has evolved into a stage from which to pontificate upon “The Truth,” whatever that is. The trial of Joe Bruno, former leader of the State Senate, for example, shows us that retribution is usually is the order of the day – a tragic-comedy replete with rumors of rogue State Police units, political payoffs and favors.

But, what about the game within the game? What about the casino of supporting a politician in hopes of currying favor at some future time? And, what about the obverse of asking for support in order to get elected in the first place?
It’s like the Emperor’s New Clothes. Few will talk about it on record and those who do, give a stock answer that “You should support and vote for the best candidate, period. That is its own reward. Expect nothing in return. The best person winning, your candidate is the success you should want – and nothing more.”

Okay, that sounds good. It has a good ring to it.

And, in fact, sometimes the success of a particular candidate really is so important that it’s close to the truth.
Downtown, the success of Margaret Chin as City Council Member, and the unexpected victory by Cy Vance as D.A. were two notable examples of people who were critical to a progressive agenda for SoHo and sister communities – as well as Manhattan, in general.

Bloomberg is still a cipher to some – because his skills have been overshadowed by a seemingly dictatorial manner of governing that were only re-emphasized by the term-limits fiasco. However, he is an intelligent and able administrator, who seems more in tune with Aeschylus than Downtown residents. Trump SoHo, the DSNY garage on Spring Street, the overdevelopment, the neutering of the Department of Buildings (no landlord scrutiny and no tenant support), the dangerous and over-the-top bike lanes in SoHo and the failure to reign-in billboard proliferation – are just a few examples of resident dissatisfaction with his Imperial style.
There is no doubt that his friendship will further empower Frank McKay, noted political genius of the Hamptons who heads the Independence Party. That friendship will now be a lot closer – since Thompson clearly would have won the election without McKay’s support, in spite of the $120 million Bloomberg spent.

For others who ran, for those who did not pay enough attention to their base of support, it was a bleak lesson. Alan Gerson, thought of as a “nice guy” (he actually is) counted on Greenwich Village voters but burned his bridges with the Downtown Independent Democrats (SoHo’s powerful political club) -- and was turned out of office. Rumors have it that Gerson angered the President of D.I.D., Sean Sweeney and other important members, by claiming that he no longer needed the club’s support. He was warned by Sweeney that such a point of view would cost him the next election. Despite being an incumbent and having broad community support, as a result of his rejection of D.I.D., Gerson lost his bid for re-election. Activists were so antagonistic towards Gerson that they went so far as to create a website with the slogan ABG – anyone but Gerson. The lesson should not be lost on others.
But, as Monty Python’s famous line goes: 'No one ever expects the Spanish Inquisition.' Once elected, many politicians have brushed off their former supporters. It is a familiar gripe.

The recent defection by David Reck, Bill Love and Linda Belfer in a bid to form a new political club, followed on he heels of the Gerson loss.

Described by Sweeney as the Downtown United Democrats (DUDS), the success of this, as yet unnamed group, has completed the regeneration of D.I.D. After having foiled an attempted coup by Reck and Community Board #1 Chair Julie Menin to take over the club, the exit of members who opposed Sweeney will now be complete. He described it as excising a malignant tumor without having to operate.
With 200 members, D.I.D. is now poised to become THE downtown political club. The transitional period is underway and new leadership will be reinforcing its image. Jeanne Wilcke, Adam Sivera, Jim Stratton and Pete Gleason will be joining Sweeney.

Jeanne Wilcke

Adam Silvera

Pete Gleason

Sean Sweeney

In this game, politicians need to pay more attention to the desires of leaders who DO speak for the community. Those who work tirelessly for the benefit of others -- as well as themselves -- must now start making the needs of the community much clearer – and holding candidates accountable for their promises AFTER they are elected.

Thus far, that has been conveniently forgotten.