Category Archives: Politics

2018 Seward Spark Board Endorsements

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This year’s Seward Spark endorsements again come from Micah Arbisser, who publishes the Seward Spark, and Kate Nammacher, who recently served on the Board as a director, president, and treasurer.

After reviewing the candidates’ biographies, hearing their presentations at Meet the Candidates, and reviewing the records of those who have already served, we believe the following four candidates stand out for their high levels of engagement, knowledge, optimism, and professionalism.

#1 Aaron Fineman, #4 Doron Stember, and #6 Erica Cullmann – The incumbents this year are among the most hard-working, thoughtful, effective directors in the co-op’s recent memory.  They absolutely deserve reelection. Erica, Doron, and Aaron have led us through a challenging period where they raised revenue from non shareholder sources, overhauled our budgeting process to make it more stable, expanded access to amenities, and were responsive to shareholder concerns and alternative Boardroom viewpoints.  They also toiled for 17 months to bring the best possible air rights deal to a shareholder vote, while presenting detailed and balanced information about the deal.

#2 Sidney Goudie – From Sid’s first days in Seward Park, he has demonstrated a deep commitment to our community.  Sid is well known for his friendly presence in the E section, and can often be found engaging neighbors with questions about our collective home in an effort to understand the issues from all perspectives.  He is someone who can naturally find common ground on the most pressing matters facing our co-op. Sid also has a strong finance background and focuses on long-term preservation of capital. He wants to apply his financial expertise to the co-op’s budgeting and fiscal management strategies and would be an extremely valuable Board member.

Whether or not you agree that these candidates are the best, please exercise your shareholder right to vote!

Your neighbors,

Micah Arbisser
Seward Spark Publisher

Kate Nammacher
Former SPC Director, President and Treasurer

Breaking: Air Rights Sale to be on June 2018 Ballot

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Today the co-op circulated the official announcement of the air rights sale by e-mail.  Since the last communications, there have been two key changes:

  1. The sale price was increased by over $5MM, which has been ear-marked for a 4-month total maintenance holiday for shareholders.
  2. The Board has decided to unanimously endorse a YES vote on the referendum.

We will have further analysis and opinions on the sale in the coming days…

Referee issues decision on garage lawsuit fees and costs

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When the court dismissed the garage lawsuit last summer, the judge ordered that the plaintiffs pay reasonable fees and costs incurred by the co-op in defending the suit.  Over the next few months the parties submitted arguments to a referee regarding how much the plaintiffs should have to pay.

On December 22, the referee recommended that the court award the co-op $161,088.72 in fees and costs.  We assume the court will adopt this recommendation.

It is not yet clear to us, however, how the amount already paid by one of the five plaintiffs (who settled with the co-op a few months ago for his share of the fees that were accrued at that time) will factor into this, or whether the co-op will receive any discount from our lawyers for the portion of the fees and expenses billed that the referee decided were not “reasonable” (although the lawyers are certain to disagree with that decision).

Regardless, it is highly likely that each of the remaining four plaintiffs is likely to have an extra $40k (give or take) line item on their maintenance bill in the near future, which should serve as a cautionary tale to any other shareholder who is considering suing the co-op without a really solid case.

A few air rights fact-checks

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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.

Anti-Valet Lawsuit Decided in Co-op’s Favor

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Hon. Arthur F. Engoron of the New York State Supreme Court yesterday issued a Decision and Order in favor of the co-op on all points.

The Court dismissed the plaintiffs’ lawsuit and denied their motion for sanctions, and said that the co-op is entitled to recover its attorneys’ fees from the plaintiffs (although the amount to be recovered still has to be decided separately).

You can read the full Decision and Order, which knocks down pretty much every argument the plaintiffs tried to throw at the proverbial wall.

But perhaps most instructive for certain members of our co-op community, who seem to feel that every significant decision should be put to a shareholder vote, is the following:

As a matter of public policy, the Board was under no contractual, legal, or equitable duty to involve more than 1,700 cooperators in its decision-making process.  Rather, the Board was elected specifically to conduct the day-to-day affairs of the co-op and to take entire charge of the property, interests, business, and transactions of the co-op.  It would be nearly impossible for co-op boards to function if every time they had to act, they had to entertain potentially endless debate involving numerous varying positions.

And the winners are…

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Congratulations to Karen, David, Darcey, and Carol!

The final, certified vote tallies were:
#4 Karen Suss Wolfson 793
#5 David Pearson 529
#2 Darcey Gerstein 498
#3 Carol Anastasio 465
#1 Arnold Sandler 421
#6 Norma Ramirez 408
#7 Stanley Friedland 394
ABSTAIN 2

Based on these numbers, at least 878 shareholders cast votes.

Thanks also go out to outgoing Board members Norma Ramirez and Harold Aranoff for their service to the co-op.

The Candidates on Air Rights

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Several people have asked recently about the candidates’ positions on air rights.

The first question asked at Meet the Candidates was “How do you recommend shareholders vote on the forthcoming air rights deal, and how will you vote personally?”

Paraphrasing the candidates’ answers, as we don’t have access to a transcript:

  • Stanley –  I just want to know, if we do raise the money, what we’re going to do with it.  How are we going to spend it?  What are we going to do with it to help Seward Park?
  • Norma (incumbent) – I feel every shareholder should be allowed to vote. If that happens, I’ll back the majority. [editor’s note: under our bylaws all shareholders most certainly are allowed to vote and we need 2/3 of those voting–not a majority–for it to pass.]
  • Dave – I need more information to know whether or not I’m in favor of it. If elected I’m going to work hard to make sure we’re getting a good deal and to provide as complete and detailed information to shareholders as possible.
  • Karen (incumbent) – I don’t think anybody can recommend and it’s up to individual shareholders to decide for themselves. Currently our attorneys are still negotiating as best they can and once we have better information we’ll put it up for a vote. Right now we don’t have enough information. When we do, it’ll be brought to the shareholders and it will be up to the shareholders.
  • Carol – It’s up to all of us to decide based on our personal priorities, but right now we don’t have enough facts because they are still under negotiation. Something is going to be built so I’m somewhat inclined to say yes to make sure we have a seat at the table and have some control over what they build, but I really don’t know enough yet and each shareholder’s vote is his own.
  • Darcey (incumbent) – I echo what Karen and Carol said. My view is that the board should be agnostic and I’ll make my decision as a shareholder based on what is best for my family, weighing the pros and cons once we know what they all are.
  • Arnie – “They’re going to build anyway.”  You’re told that.  It’s an insidious message that you should vote for it. Would they have offered us $46 million if they were going to build anyway? Donald Trump said in the Art of the Deal that you shouldn’t be desperate when you negotiate.  We need to hold our position and wait until we get the best offer.  We sell votes for ice cream parties.  We do all kinds of things that are not in the best interest of the co-op.  Eleven people are not experts.  None of them have been trained.  I’m a retired army colonel and women’s shelter manager but don’t pretend to know what I don’t know.  My whole platform is we need to have more views involved. [The current board says] they need to reach out, engage and educate.  That’s why we don’t have the vote now.  I don’t think that’s the truth. I think they saw that people are saying no, and they wanted more time to get the yes votes.

My personal view is that because a shareholder vote is required for any air rights deal, it is less important whether a candidate is “for” or “against” than whether a candidate appears to understand the negotiation and approval process, and is committed to presenting the deal to shareholders in as accurate and balanced a way as possible (recognizing, of course, that we all have biases).  Shareholders should keep in mind that it is up to the board to work thoughtfully and efficiently with the professionals they’ve hired to first finish negotiating the deal, and then to present it to all of us in a way that distills a whole host of complex issues into an accurate and comprehensible package on which we can vote.