Opponents of the air rights deal have been busy mailing, hand-delivering, and e-mailing materials to shareholders and updating their website.  We thought it was worthwhile to take a look at a few of their claims:

• “The developer can only build 71,000 sq ft as-of-right, but, if we sell our air rights, will build a massive structure that’s more than 3 times bigger.”  True.  The developers talk about the deal as a question of 115,000 sq ft as-of-right vs. 277,000 sq ft with air rights, because that’s the floor area that they’ll have to sell post-development.  But the 44,000 sq ft landmarked Bialystoker home isn’t going anywhere, so from our perspective, it’s really a choice between whether the developers can build new buildings totaling 71,000 sq ft or 233,000 sq ft.
• “The co-op will net about $26 million after tax.”  Probably true.  We have not yet seen the tax analysis that the Board has commissioned, but expect it to be in the ballpark of $25-30 million after tax.
• “The deal can pass with 365 (or fewer) yes votes.”  Theoretically true but misleading and irrelevant.  The bylaws require 2/3 of those participating in the vote to say “yes” in order for it to pass.  While in theory it could pass with only 365 “yes” votes, that would mean only 547 shareholders turned out to vote, and we expect turnout to be very high.
• “Shorter buildings with more floor space are more likely [if the deal fails than the 20 and 17 story buildings Ascend says it is ‘considering’].”  Maybe true.  The deal opponents are correct that 71,000 square feet spread among 37 newly built stories would yield very skinny towers with a high proportion of square feet dedicated to unsellable elevators and stairwells.  But higher floor apartments also command somewhat higher prices per square foot, and the footprint of what the developers can build as-of-right may be limited by zoning requirements for setbacks and rear yards (we don’t know enough about those requirements to offer an opinion).  So we have no way of knowing for sure what the as-of-right alternative to an air rights deal would look like.
• “This sale is not the last chance for the coop to monetize its assets.”  Sort of true. The developers were engaging in some misleading hyperbole of their own when they said in their first big flier that they are our only potential buyer and this is our only chance to sell. It’s true that if we reject the deal, then the developers (or a new developer who might take over the project) could come back with a better offer.  And it’s true that our air rights can be used to build something on our own property.  But the deal opponents overstate their case almost as badly as the developers.  If the shareholders reject the deal by a large margin, it’s equally possible that whoever ends up with the project would decide it’s not worth spending more money to try to do a deal with us, and would forge ahead with whatever they can build as-of-right.  And if they build as-of-right, the only way we can use our air rights (absent the City Council changing the rules) will be to build on our own property.

Overall, we’d rate this first flurry of materials (excluding some of the anonymous mailings) from the opponent group as “not terribly misleading.”  In the stuff they’ve put their names on, they’ve made some good and important points, called out the developers where the developers edged into misleading territory, and mostly (but not entirely) refrained from going into misleading or disingenuous territory themselves.  Some of the anonymous communications have been far less responsible, and we urge readers to ignore anonymous materials and focus on the ones that are attributed to specific individuals or groups.

It bears repeating, however, that shareholders will not be deciding whether they want a 71,000 or 233,000 square foot development next door, but whether we think the downsides of a 233,000 square foot development (and there are definitely downsides) are worth accepting in exchange for the developers putting tens of millions of dollars in our cooperative coffers.