Sponsored Post - 16 One Bedroom Affordable Apartments For Rent At Roosevelt Island Westview Building Ranging From $1,566 To $2,043 Monthly - Submit Your Application

CLICK HERE FOR FOR MORE INFO AND TO REQUEST APPLICATION

Sponsored Post - Westview Co-op Wishing The Roosevelt Island Community Happy Holidays And Joyful New Year! Offers Opportunity To Purchase On NYC Waterfront

Westview Wishing The Roosevelt Island Community Happy Holidays And Joyful New Year!
 

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More info about the Westview building here.

Sponsored Post - Join Development Marketing Team For Yoga On Roosevelt Island Meditation Lawn September 26 Followed By Breakfast At Westview Co-op Sales Office

Yoga on Roosevelt Island

Join Development Marketing Team for Yoga on the Roosevelt Island Waterfront!

When: Sunday, September 26 10:30AM-11:30AM

Where: Meditation Lawn, south of 531 Main Street.

Followed by breakfast in the Westview Sales Gallery from 12-1PM. 

RSVP Here.

Roosevelt Island Bank Branch Search Update - RIOC President Says Westview Building Owner Not Willing To Help Get A Bank For Empty Space, Westview Owner Says Not True And Would Consider Any Leads Or Proposals For New Robust Retail Corridor

As reported June 18

Roosevelt Island has been without a bank since Amalgamted Bank closed it's Main Street branch last September. 

Since that time, the Roosevelt Island Operating Corp (RIOC), Main Street Retail Master Leaseholder Hudson Related, local politicians and residents have been unable to persuade any bank to open on Roosevelt Island. 

During yesterday's RIOC Operations Advisory Committee meeting, RIOC President Shelton Haynes and Chief Financial Officer John O'Reilly reported that banks refuse to open a branch on Main Street. 

However, there is interest in opening a bank branch near the Roosevelt Island Transportation Hubs, Tram, Subway and Ferry in Southtown near the Riverwalk Buildings, Cornell Tech and the newly opened Graduate Hotel. 

RIOC plans to offer space in the renovated Sportspark building to a bank that may be interested in the location....

I asked Hudson Related's David Kramer:

Has Hudson tried getting a bank for Main Street? What do they say?

Mr Kramer replied:

We’ve tried to recruit a bank, and thus far, they’re only interested in being located in Riverwalk, where we don’t have a vacancy.

I’d be surprised if a bank was interested in Sportspark, not enough foot traffic for them.

Roosevelt Island Residents Association (RIRA) President Rossana Ceruzzi recently discussed the lack of a Roosevelt Island bank with RIOC President Shelton Haynes. According to Ms. Ceruzzi, Mr. Haynes said that Westview building (site of the former Amalgamated Bank) owner  David Hirschorn:

... is not willing to help...

get a bank on Roosevelt Island and Mr Hirschorn:

... doesn't want to work with us to use the old space.

I asked Mr Haynes if he wished to add to or clarify his comment about Mr Hirschorn. RIOC Public Information Officer Amy Smith replied:

Since Amalgamated Bank closed its branch on Roosevelt Island last year, RIOC has received several inquiries about bringing another bank to the island. As part of that strategy, RIOC approached Mr. Hirschhorn with the idea of bringing another bank to the Amalgamated Bank space but, unfortunately, he was not willing to entertain our proposal for a new bank at that location. And, unfortunately, many of the banks that have been approached to establish a presence on the island have declined our offer either because of limited storefronts large enough to outfit a new branch along Main Street, or because of an interest to be close to a transportation hub such as the F train or the Tram. That said, RIOC continues its search to bring a new bank to the island in an effort to fulfill the needs of the community.

RIOC CFO John O'Reilly followed up with a phone call with me yesterday saying that during a summer 2020 telephone conversation with himself, Mr Haynes and Mr Hirschorn, the Westview owner indicated he was being paid rent by Amalgamated Bank through September 2021 and was not interested in putting any effort at the time to market the space to another bank.

In response to my inquiry, Mr Hirschorn replied:

I was extremely disappointed when I first received notice from Amalgamated back in June 2020 that they would be permanently closing their Westview Branch.  Attached is the letter I sent to Amalgamated at the time reminding them of the importance to residents of having a banking facility here on Roosevelt Island and asking them to reconsider their decision to permanently close the branch.  Unfortunately, they were just not able to continue retail banking at Westview.

I then reached out to a very senior person at a major bank with whom I have a close relationship and discussed the possibility of his bank opening a branch in the former Amalgamated space.  I also asked him, as a special favor to me, to reach out to his banking colleagues as to whether they would consider the Westview location for their banks.  Regrettably, there was just no interest.  Remember, this was during the height of the pandemic, a difficult time for everyone.

I reached out to Shelton Haynes at RIOC to share with him what I had learned and to see what RIOC might be doing.  Mr. Haynes advised that his experience was similar to mine.  I suggested that he explore with the relevant NYS agencies whether there was some State incentives that could be offered to attract a new bank and asked him to be back in touch with me.  Until recently reading your article and listening to Mr. Haynes’ report to the RIOC Board, I was unaware of any steps RIOC had taken and did not know they were courting banks to locate at Sportspark.   I was disappointed, but not surprised, to hear Mr. Haynes report to the Board that based on his canvassing of banks, none were interested in opening a branch on Main Street, which would include Westview.

Since Amalgamated’s lease expires this month,  a decision needs to be made whether to remove the vault and safe deposit boxes.  I would imagine that any chance that a new bank would consider Westview as a banking site would be severely reduced once the vault and safe deposit boxes are removed as the cost to replace these items is quite significant.  I am glad that you reported on this topic since it is indeed very timely.   I reached out to Amalgamated yesterday, but regrettably they cannot reverse course.  If RIOC has any leads or proposals, I would certainly want to be able to consider them.  However, based on Mr. Haynes’ recent report to the Board,  the reality of the situation appears to be that no banks are interested in Main Street/Westview.  My understanding of the banking world today, particularly given the tremendous investment banks have made in their on-line banking platforms, is that Roosevelt Island is just not a location that would support a new brick and mortar branch.  Maybe RIOC knows something I do not.

The Westview retail space is at an interesting juncture.  RIOC will soon be vacating the Westview offices at 591 that it has occupied rent free for 45 years, having decided to move out and pay rent elsewhere.  The Westview Wine and Liquor store will be moving to Island House and of course the Amalgamated space is now empty.   While not something we planned, it does present an opportunity to rethink Westview’s commercial spaces.  With the pandemic hopefully behind us, and a return to a more normal business environment on the horizon, we look forward to creating a robust Westview retail corridor that provides services that the community wants.  In the meantime, we are hard at work completing the Westview cooperative conversion.  We will soon be offering fully renovated Westview Apartments with amazing River views (contact alyssa@developmentmarketingteam.com). 

On a final note, I was pleased to learn that RIOC intends to address the sunken roads, collapsed curbs and resulting damaged sidewalks at Westview (some of the worst of which are in front of the Amalgamated space), as part of its overall program to address these deficiencies throughout the Island.  This will certainly help attract retail tenants.  I just hope that we will see action soon.  Thank you RIOC.

Here's the RIOC Operations Advisory Committee meeting discussion about the possibility of a Sportspark Bank branch (25 minute mark). 

 

According to Mr. O'Reilly, Amalgamated Bank closed their Roosevelt Island branch with 800 customers and $9 million in deposits, needing $20 million to break even.At closing, RIOC had over $40 million in deposits at the Roosevelt Island Amalgamated Bank  branch. But, Amalgamated did not give the Roosevelt Island branch any credit in evaluating it's viability for the RIOC $40 million deposit which was credited to the Amalgamated corporate group.  

The Amalgamated Bank branch opened on Roosevelt Island in 2009. At that time, then Roosevelt Island NY State Assembly Member Micah Kellner reported:

On October 1st, I was proud to join Amalgamated Bank President and CEO Derrick Cephas, as well as Borough President Scott Stringer and a number of other distinguished guests, to mark the grand opening of Amalgamated’s new branch on Roosevelt Island. The opening marks the beginning of a new era of community banking for island residents — a secure replacement for the New York National Bank branch that closed this summer.

In July, I posted about how I worked with Assembly Banking Committee Chair Darryl Towns to ensure that the State Banking Department designated the island’s new Amalgamated branch as a Banking Development District (BDD) branch. This means that $10 million in public funds have been deposited with the new branch, providing the security it needs to serve as a reliable long-term bank for Roosevelt Islanders. Thanks to the BDD designation, as well as support from State Comptroller Thomas DiNapoli, City Comptroller William C. Thompson, Jr., the Roosevelt Island Operating Corporation, and other stakeholders, island residents will continue to have a convenient location to do their banking for many years to come....

Apparently a $40 million deposit from RIOC is not sufficient incentive to keep or obtain a new bank branch on Roosevelt Island's Main Street.

After 2 1/2 Years Of Review, NY State Attorney General Approves Roosevelt Island Westview Building Affordability Plan - Former Mitchell Lama Building Will Begin Coop Conversion, Current Residents Can Buy Apartments On Average of $246 PSF, Or Remain As Renters

On a regular basis over the last 2 1/2 years,  Roosevelt Island Westview 

residents have been asking about their building's privatization and affordable co-op conversion plan status, expressing frustration 

at not getting any information from the building ownership or the Westview Task Force, purportedly representing the residents:

 I am a tenant at the Westview. Although the deal on the building's privatization has been reached 2 years ago, nothing happened since then. And we get no info on the process from anyone..

Early Saturday morning April 3, the Westview Task Force answered with an email announcing

Friends, Neighbors, Westview Residents,

Great News!

We are very pleased to inform you that the NYS Attorney General has accepted the Westview Affordability Plan allowing Westview to proceed with conversion of the building.

In the coming weeks, the Sponsor plans to distribute the approved Offering Plan (aka Black Book) to all tenants.

Once the Black Book is available our attorneys will provide a summary of the approved Plan.

We also plan to schedule Q/A sessions (virtual and/or voice) regarding the Plan and next steps.

It has been a long wait for everyone and we are thrilled to share this news with you today.

Thank you to all for your patience and support.

On Monday, April 5,  David Hirschhorn, the managing member of Westview's ownership, confirmed acceptance of the offering plan by the NY State Attorney General. 

                       Image Of Mr Hirschhorn Conferring With Then RIOC President Susan Rosenthal During June 2018 Westview Town Hall

 Mr Hirschhorn issued this statement on behalf of the Westview ownership:

Perched atop the East River on Manhattan’s Roosevelt Island, coop apartments in the 19-Story, 360 unit Westview Apartments will soon be offered for sale. The New York State Attorney General has just accepted the offering plan for filing allowing sales of these much anticipated coop apartments to proceed. “We are extremely pleased to now be able to move forward with the sale of these apartments to both our existing tenants, who have so patiently awaited this day, as well as to new individuals and families looking for reasonably priced highly customized renovated apartments on Roosevelt Island,” says David Hirschhorn, managing member of the developer, WV Preservation Partners, LLC,

Westview was one of four original Roosevelt Island buildings that were developed in the 1970s as part of the New York State Mitchell-Lama program providing affordable housing for middle income residents. In 2018, Westview withdrew from the program – the last of the island buildings to do so. “We are very appreciative of the tremendous effort and support that we received from our State partners, including the Governor’s Office, the Division of Housing and Community Renewal, the Roosevelt Island Operating Corporation and Empire State Development, without whose participation in this public – private partnership the conversion of Westview and the preservation of affordable housing would not have been possible,” said David Hirschhorn.

In 2015, the same developer successfully converted Island House, Westview’s sister property next door; it was extremely well-received by both existing residents and outside purchasers.
As in Island House, Westview will offer existing tenants the unprecedented opportunity to purchase their apartments for well below market prices or, for those tenants who elect not to purchase, they will be able to continue to rent their apartments with rent increases based on the RGB increases (although the apartments are not rent stabilized).

“Buyers looking to experience Manhattan's best kept secret will soon have the opportunity to purchase fully renovated units with high end finishes and unparalleled Manhattan views on Roosevelt Island – only 90 seconds to the East Side. Its like living in your own private park,” says Alyssa Brody of the Development Marketing Team (alyssa@devmarketingteam.com). A limited number of similar residences are immediately available at Island House.

I asked Mr Hirschhorn:

Have there been any changes to the Affordability Plan since agreed to by owner and residents?

He replied:

No material changes, other than that I have more grey hair now.

 Roosevelt Island resident and real estate agent Kaja Meade adds:

This has been a long anticipated outcome. 

Co-op living is real investment in community. Roosevelt Island has peaked a lot of interest from off-island buyers lately, and if that can benefit Westview sellers that have been waiting through this process, than that's great. 

It's also exciting that new co-op owners, that are able to buy their own units, will enjoy the benefits of ownership. Roosevelt Island has a deep community history, and folks continuing to rent in Westview will hopefully enjoy building improvements and shareholder vested interest in a great new co-op.

As reported July 23, 2018, the NY State Department of Homes & Community Renewal (DHCR) approved the terms of the Westview Affordability Plan as detailed in this memo of support to the Roosevelt Island Operating Corp (RIOC):

Executive Summary

The decision to be made is whether the State (ESD, RIOC, and HCR) should take the necessary steps to approve an affordable home ownership conversion plan for Westview on Roosevelt Island. The Plan provides for current tenants to be able to purchase their apartments at below market value with non purchasers receiving guaranteed rent protections. In approving the Plan, the State will need to extend the Ground Lease as follows: an increase in effective annual ground to $325,000 escalating by 10% every 5 years through 2048 and then 4% annually through 2068.

The reasons to support the Plan are as follows:

• Preservation of Mitchell-Lama(s) (M/L) as a housing resource is a priority policy initiative;
• Non-purchasing tenants will have annual rent increases limited to a formula based on % of AMI tied to NYC Rent Guidelines Board rates
• Non-purchasing tenants will face an initial 6.16% increase (the first at Westview since 2009), down from an initially proposed 14.8% increase
• Residents are being offered to purchase apartments at approx. 30% of market value with limitations being imposed on re- sales; rent protections tied to RGB guidleines are guaranteed for non-purchasers;
• Income restrictions for new purchasers based upon the statutory M/L formula;
• Sponsor contributions and flip tax proceeds fund a substantial capital reserve fund;
• Substantial flip taxes on affordable units help keep project affordable;
• The Plan is overwhelmingly supported by the Westview tenants, with 92% of those voting in favor of the Plan (73% of the apartments voted);
• The Plan is supported by local elected officials, including AMB Seawright and MBP Gale Brewer;
• All of the above vs. the owner exercising the option to buyout of the M/L program and transition Westview to a market rate rental or coop likely forcing a significant number of families to relocate
• Sponsor will deposit into a special fund $3.6 million for Tenant Association expenses and other building related items as may be jointly approved by the Board of Directors of the Corporation and the Sponsor.

Background

Westview is a 361 unit Mitchell-Lama rental housing development on Roosevelt Island. In 1969, the City of New York leased Roosevelt Island to the Urban Development Corporation (UDC) for a period of 99 years. A master development plan, later amended, for the creation of a mixed income community was implemented. UDC (now known as ESD) thereupon entered into subleases with the four housing companies developed under the M/L program, Westview being one of them. The Westview sublease (hereafter referred to as the “Ground Lease”) expires in 2028.

Mitchell-Lama Law/Voluntary Dissolution

Westview is organized pursuant to Article II of the Private Housing Finance Law (PHFL); Section 35 of the PHFL allows a M/L housing company to voluntarily dissolve (buyout), without the consent of the Commissioner, upon prepayment of its mortgage after twenty years from the date of initial occupancy. Westview is currently eligible to voluntarily dissolve. Of the 282 State M/L(s) originally constructed, 133 have bought-ought of the program.

Starting with the Spitzer Administration, a policy initiative was developed to aggressively pursue the preservation of M/L companies as an affordable resource, and these efforts have been greatly expanded upon during the Cuomo Administration. In the case of Westview, we engaged the owner, David Hirschhorn, to discuss the possibility of a conversion to a Business Corporation Law (BCL) cooperative (but with long-term affordability restrictions) modeled on the cooperative regime implemented as part of the 2012 buyout of Westview’s sister property, Island House, from the M/L program. Mr. Hirschhorn has agreed to such an approach, and the current Plan under consideration is the product of our negotions with him and his subsequent agreement to proceed on such basis.

The Affordability Plan

The major provisions of the agreed upon Affordability Plan are as follows:

• The term of the Affordability Plan is 30 years.
• Insider prices on average of $246 per sq. ft. (market price of $816 per sq. ft.)
• Initial resale price by purchaser – $492 per sq. ft. (increasing annually by 7.5%) The first $6 million of flip tax proceeds will be deposited into the Apartment Corporation’s Reserve Fund account. Therafter, the next flip tax proceeds will be distributed a) 50% to the Sponsor, up to the difference between the Reserve Fund contribution, and the Local Law 70 Reserve Fund contribution, and b) the remaining 50% shall be deposited into the Apartment Corporation’s Reserve Fund account. All flip tax proceeds thereafter shall be deposited into the Apartment Corporation’s Reserve Fund account.
• A flip tax equal to 60% of the gross profit for the first two years, declining by 5% per year to 30%, then declining by 2% per year to 22% through year 30 will be assessed on insider first time sales
• Future purchasers must meet income qualifications for admission based upon the M/L statutory formula of: “[Max. Income for Admission = 7X or 8X (depending on family size) the annual carrying charge + 6% of equity]”
• Non-purchasing tenants will receive annual rent increases equal to the then 1 year RGB increase plus a % based upon income as it relates to AMI; for households with an income at less than 200% of AMI, the annual increase cannot exceed 7.5%.
• Sponsor will fund a $6 million reserve fund for specified capital improvements. 
• Spsonsor is permitted to sell up to 45% of units at market.

RIOC

Regarding RIOC’s ground rent payments, an agreement has been reached on an annual ground rent payment beginning at $325,000. In total, there are three (3) revenue sources being used to generate payment under the ground lease: a) a direct ground rent payment of $325,000 escalating at 10% every 5 years through 2048 and then 4% annually through 2068; b) a 5% capital event fee on all sponsor sales (capped at $1,500,000); and c) a 1% transfer fee on all re-sales.

While the negotiated ground lease terms are less favorable than what RIOC had sought based on its appraisal of the land (and admittedly represent a lower percentage of notional value than was achieved as part of the conversion and exit from the M/L program of Westview’s sister property, Island House, in 2012), the negotiated Westview lease terms nonetheless represent in whole dollar amounts a reasonable improvement over what was achieved at Island House ($236,000 per year) in 2012, and constitute a critical and necessary component of the grand bargain being struck with the owner that is enablingWestview to remain affordable for renters for 30 years and to offer affordable  first-time homeownership.

Discussion

Other than the 2012 conversion of Island House, there has never been a successful conversion of a State Mitchell-Lama rental to affordable home ownership (a NYC supervised M/L, West Village, has been successfully converted). The difficulty encountered is the need to satisfy the goals of both the owner and residents, while maintaining affordability. On the one hand, the owner is being asked to leave some money on the table (it has been pointed out that, in this case, the owner’s profit potential is somewhat limited by only 10 years remaining on the existing ground lease) by offering the sale of units at 30% of market. From the perspective of those tenants considering purchasing, they are being asked to make a fairly significant investment and not only must determine whether the additional monthly cost is affordable but whether the potential return justifies making the investment. Also a factor for the tenants to consider is the owner’s right to exit the Mitchell-Lama program and operate the property as a market rate rental which likely will cause a significant number of families to have to relocate.

In sum, we are attempting to achieve a balance as to the owner’s and tenants’ interests and, once having done so, incorporate additional restrictions so that affordability for future residents and non-purchasers is being achieved.

Summary and Recommendation

To summarize, an agreement has been reached among the involved parties to offer an affordable home ownership opportunity to Westview tenants while preserving long-term affordability for those who choose not to buy and instead continue to rent. Further, an agreement has been reached to extend the Ground Lease between RIOC and the property owner, a necessary action to implementing the conversion. The agreement was successfully negotiated with the knowledge that a failure to do so would result in Westview’s withdrawal from the M/L program and it becoming a market rate rental.

The structure of the conversion plan – insider pricing, flip taxes, resale prices, capitalized reserves, and regulated rents, etc. – negotiated between the owner and the Tenant Association representatives – was presented to the tenant body and received overwhelming support. Also, future ground rent payments through the end of the extended lease term have been settled upon between the owner and RIOC, which effectively reach market levels during the post-affordability term. We view the agreement in its entirety as successfully achieving the State’s goal of preserving Mitchell Lama housing as an affordable housing resource and recommend you support the Plan.

Here's video of the July 23. 2018 RIOC Board Meeting approving the Westview affordability plan.

Roosevelt Island Westview Building Residents Frustrated At Getting No Status Update On Affordable Coop Conversion Offering Plan - Ownership And Tenants Task Force Reply Process Will Be Completed Soon

On a regular basis over the last several months Roosevelt Island Westview Building

 residents have asked about their building's 

                                                                                 Image From 2018 Westview Town Hall

privatization and affordable co-op conversion plan status, expressing frustration at not getting any information from the building ownership or the Westview Taskforce representing the residents:

 I am a tenant at the Westview. Although the deal on the building's privatization has been reached 2 years ago, nothing happened since then. And we get no info on the process from anyone....

Last week, I followed up on earlier inquiries asking Westview ownership representative David Hirshorn about:

... the status of Westview privatization and concerns of residents that they have not been informed about the current status of privatization efforts. Can you provide any details as to the current privatization status of Westview, when it may be completed and what are any obstacles holding it up... 

Mr Hirshorn replied:

While I am limited in what I can say about a pending offering, I can say that the offering plan process in every conversion or new development throughout the State involves the sponsor submitting draft materials to the Attorney General’s office and the AG’s office reviewing these submissions, asking questions and issuing comments – what the AG’s office refers to as “deficiencies.” The Westview process is no different than the process in every offering, except that in complicated offerings such as Island House and Westview, the process can be longer than in a more typical cookie cutter offering. Once the AG is satisfied with the submission, they issue what’s called an “acceptance letter” which means that the sponsor is then authorized to issue the Black Book. At that point the selling process begins. We successfully completed this same process in Island House and I am confident that we will soon complete the Westview review process too.

I certainly understand residents’ frustration with how the long the process has taken as I too look forward to moving forward. For those residents who do not intend to purchase their apartments, the Black Book does not change how their rent will be determined or the other terms and conditions of their rental. All of that is set forth in the Affordability Plan that they received at the time of withdrawal from the Mitchell Lama program – several years ago – and is the same as what is currently in effect and has been in place since withdrawal.  

We are now in the final stages of the offering plan process. Because the laws governing communications to residents during an offering process are severely limited, it is understandable that some residents are frustrated and concerned that things have stalled. However, this is not at all the case and the affordability terms for both home ownership and residents who continue to rent, remain unchanged from what was negotiated. Just as we did in Island House, we have and continue to work in close partnership with the Westview Taskforce and their attorneys, in moving forward with the offering. We look forward to continuing to work closely with Task Force leadership who were strong advocates for the Westview residents (improving upon the original affordability plan) and now pulling on the same oar with us as Westview moves into the next phase --homeownership. 

While any offering involves a lengthy process, Westview is an unusually complicated structure with an enormous amount of documents needing to be reviewed and processed. The Attorney General’s Office has been a great partner in this process and has been diligent and timely in their review. While the COVID shutdown certainly has not helped, I am confident that together with tenant association counsel, we and the Attorney General’s Office will soon be able to conclude the offering plan process culminating in a Black Book.

And received this Westview Task Force update last week too:

Dear Westview Tenants, 

The Westview conversion is moving forward and in progress. 

The Affordability Plan has been submitted to the NYS AG for approval and Sponsor and AG are currently working to resolve remaining outstanding details. 

Our lawyers are involved to ensure that agreed upon terms outlined in the Affordability Plan and approved by Westview tenants remain unchanged. 

 This is the normal process for a conversion plan to go through similar to the process IH went through before us. 

The past 6 months have been challenging for everyone and our conversion approval delayed as a result. 

We are disappointed with the slow pace of discussions between the Owners and NYS AG but remain hopeful that the remaining outstanding details will be resolved soon. 

Additionally, the Taskforce has been instructed by the AG's office not to comment on timing of the Black Book as these discussions are still ongoing. 

We can only confirm that the approval process is in progress and moving forward. 

The remaining work to be done is between the Sponsor and AG and out of our hands. At this point in the process we are all tenants, in it together, and waiting for good news. 

We hope this update is helpful and hope to have more news to share soon. 

Thank you for your patience and continued support. 

Please take good care, stay healthy, stay safe. 

Westview Taskforce

Read more about the Westivew Ground Lease extension, exit from Mitchell Lama Program and Affordability Plan at this 2018 post.

What's It Like Hanging Outside On Ledge Washing Roosevelt Island Building Apartment Windows- Westview Residents Frustrated At Their Dirty Windows And Would Like Them Cleaned So They Can See Lovely Views

"Please don't fall" and "You are courageous men" were words spoken by a Roosevelt Island resident to the workers cleaning the windows exteriors of her 14th floor apartment high above the building courtyard as shown in this video taken recently.



The Island House resident was happy to have her windows cleaned. But. Roosevelt Island residents of the next door Westview Building have been frustrated with their inability to get their own windows cleaned. According to long time Westview resident Matt Katz:

... Over a period of six months, starting about a year and a half ago, every apartment had new windows installed. In my estimation, they have been excellent, keeping out wind, temperature extremes, and rain.

However, and from the day they were installed, they have never been cleaned. Over the 20 years my wife and I have lived in Westview, the procedure was that tenants would hire a cleaner, staff or otherwise, to remove the sliding panels and use squeegees on mop handles to address the outside panes. We have learned from our super that this is no longer allowed and to be patient while the complicated issue of how to wash windows is determined. Maintenance staff has allowed that these new windows are no more complicated than the old ones and may be cleaned using the same format. Emails and phone calls to the on-site manager go unanswered. Currently, my windows are opaque and I would like to enjoy the lovely view outside my window....

The subject of Westview Window washing was raised during the the June 13 Roosevelt Island Town Hall with elected officials. Roosevelt Island's NY State Assembly Member Rebecca Seawright wrote to Westiview Building management requesting that they respond to the Westview residents concerns.

Seawright Window Washing Letter

The Westview Task Force (WTI), comprised of building residents, sent out this July 10 memo to residents

Re: Window Cleaning Update

WTI has been in contact with the Sponsor in connection with Window cleaning. We are pleased to confirm that the Sponsor intends to have all apartment and hallway windows cleaned by a professional window cleaning company.

Although in the past window cleaning was not provided by Management, window cleaning will now be provided at no cost to all residents as the final step in the window installation process.

Management is in the process of bidding out the window cleaning job with professional window cleaning contractors and will let residents know when the cleaning will be done, which will commence as soon as a contractor is selected and available to start. The entire job will take approximately 4-6 weeks to complete.

In the future, we (or the new COOP Board once in place) will work with Management to establish a procedure for periodic window cleaning for residents to sign up for window cleaning – the cost of this service will be based on the size of the apartment.

In the past, residents often made arrangements for staff to clean apartment windows after hours on a fee basis. Because of legal and insurance reasons, staff are not permitted to perform window cleaning, including after hours.

Hopefully, Mr Katz and other Westview residents, will soon be able to look out clean windows at their lovely Roosevelt Island views.

Roosevelt Island Westview Building Ground Lease Extension On RIOC Board Meeting Agenda Tonight - Here Are The Details On Mitchell Lama Exit And Resident Affordability Plan

On July 18, the Roosevelt Island Operating Corp (RIOC) Real Estate Development Advisory Committee met in Executive Sessioin (closed to the public) to discuss the Westview building

ground lease negotiations. As reported that evening:

Following the Executive Session, I spotted RIOC President Susan Rosenthal on Main Street. I asked what happened at the meeting. Ms Rosenthal replied:

Board meeting has been scheduled for Monday...

Translation, a Westview agreement has been reached and will be voted on at Board meeting on Monday.

More details on the Agreement coming soon.

Here are the details.

 It looks like the Westview Affordability Plan, Privatization and Ground Lease Extension will be approved at this evening's RIOC Board meeting. Among the items on RIOC Board Agenda for meeting tonight is:

III. New Business
1. Authorizations Related to Amendment to Westview Ground Lease (Board Action Required)

Below is RIOC CFO Kimberly Quinones July 20 Memo in support of the Westview Ground Lease Amendment to the RIOC Board of Directors:

EXECUTIVE SUMMARY

At its July 23, 2018 meeting, the Board of Directors of RIOC will be asked to consider approval of an amendment (the “Amendment”) to the 1973 ground lease (“Ground Lease”) with NorthTown Phase III Houses, Inc., the owner of Westview (the “Owner”). Approval of the Amendment would enable the Owner to pursue an affordable home ownership conversion plan for Westview (“Affordability Plan”). The Affordability Plan provides for current tenants to be able to purchase their apartments at below market value with non-purchasers receiving guaranteed rent protections. In approving the Affordability Plan, RIOC will need to extend the Ground Lease with increases for Tax Equivalency and Ground Rent payments as provided in the Amendment. Prior to approving the Amendment, the Board will be asked to approve certain environmental findings. Proposed Board resolutions adopting the environmental findings and approving the Amendment are attached.

PROPOSED AMENDMENT

The Proposed Amendment would modify and extend the existing Ground Lease between RIOC and the Owner governing a Mitchell-Lama building with 361 residential rental units (“Westview”). Although the Ground Lease is not scheduled to terminate until 2028, certain changes in circumstances merit the proposed Amendment. The Owner seeks to exit the Mitchell Lama program, as is its right under the State’s Private Housing Finance Law, and pursue a cooperative and condominium conversion (the “Conversion”). The Owner also seeks to refinance the mortgage on Westview. In order to accomplish these goals, the Owner needs to extend the term of the lease. RIOC seeks to preserve affordable housing, consistent with its mission and statutory purpose.

RIOC has worked with the Owner and the Empire State Development Corp. of N.Y. (ESD) the New York State Division of Housing and Community Renewal (HCR) to develop a plan that balances the parties’ goals. In exchange for an extension of the Ground Lease at a below market ground rent, the Owner has agreed to maintain Westview as an affordable housing complex for a period of 30 years pursuant to the Affordability Plan. In exchange for affordability protections, the expiration date of the Ground Lease will be extended from January 31, 2028 through December 22, 2068, and the ground rent payable to RIOC will be less than a full market ground rent unencumbered by the Affordability Plan for a lease term through 2068. In addition, the Amendment will allow RIOC to remain in occupancy of its current office space for a period of up to five (5) years, with no rent being payable by RIOC for the first three years. Finally, the Amendment will permit the Owner to refinance its existing mortgage at advantageous rates so it can make necessary capital improvements to Westview.

AFFORDABILITY PLAN HIGHLIGHTS

The Affordability Plan provides that for the next 30 years at least 55% of the 361 residential units, (199 units) will either be affordable restricted price cooperative apartments or affordable rental units. Affordable cooperative apartments will give existing tenants the opportunity to purchase at a substantial discount while restricting resale prices and instituting income limitations upon subsequent purchasers. Tenants who do not purchase apartments will be provided with rent increases tied to the “Rent Guidelines Board” increased by 6.16% plus a 0% to 5% add-on depending on the tenant’s income. Tenants who do not purchase their units will be provided subsidized rent for as long as they remain up to the next 30 years.

Please note that the cooperative Conversion will require the approval of the NYS Attorney General’s Office. In the event of non-approval, the building will convert to an “Affordable Rental” whereby at least 55% of the residential units will be provided subsidized rents as described above for the next 30 years.

As detailed in the attached Affordability Plan, the Sponsor is required to make an up-front capital contribution to the building’s Capital Reserve Fund.

GROUND RENT HIGHLIGHTS

Under the Amendment, the effective starting annual ground rent would be $325,000 (an increase as Westview does not currently pay ground rent), and would increase by 10% every 5 years during the 30 year affordable period, and thereafter at 4% per year. The ground rent amount is supported by an appraisal of the leasehold encumbered by the Affordability Plan. The ground rent was structured in order to keep cooperative maintenance charges to a minimum. Ground rent will be comprised of three components: Base Ground Rent (paid by the Lessee); Transfer Resale Fees (paid by the shareholders upon re-sale); and Capital Event Fee (referred to as Sponsor Transfer fees in the Amendment) (paid by the sponsor on initial sales). The NPV of the projected estimated revenues comes to approximately 30% of appraisal. The appraisal was performed by Jerome Haims, a highly respected appraiser with many years’ experience with public/private New York real estate. In addition, a Valuation Letter was also obtained from Newmark Knight Frank.

TAX EQUIVALENT PAYMENTS (TEP) HIGHLIGHTS

The Amendment provides for a ten (10) year phase-in of Tax Equivalent payments to market rates for units being sold or rented at market, provided that for the first thirty years, the Tax Equivalent Payments for market rate apartments will be based on 80% of the market based tax equivalent payment. Thereafter, the Equivalent Payments for market apartments will increase to 100% of market based TEP. On July, 2018, the Empire State Development Corp. of N.Y. (ESD) approved the TEP provisions in the Affordability Plan and gave its consent to the ground lease extension.

ENVIRONMENTAL REVIEW

Counsel has advised that the Proposed Amendment is a Type II action under the State Environmental Quality Review Act (“SEQRA”), and therefore does not require environmental review. However, as a conservative measure and for the avoidance of doubt, RIOC staff has worked with outside environmental counsel to prepare the attached Short Environmental Assessment Form and addendums (“SEAF”) to assess any potential environmental impacts that may result from the Proposed Amendment. Based on the SEAF, I recommend that RIOC conclude that the Amendment and implementation of the Affordability Plan will not have a significant adverse impact on the environment. Copies of the SEAF and a proposed negative declaration for Board approval are attached.

RECOMMENDATION
I believe that, in keeping with RIOC’s corporate mission of promoting Affordable Housing on the Island if economically feasible, the proposed ground lease extension accomplishes this and I recommend its approval....

Also, NY State Department of Homes & Community Renewal (DHCR) memo to RIOC in support of the Westview Affordability Plan.

Read more »

Good News, But Fingers Still Crossed - Agreement In "Principle" For Roosevelt Island Westview Affordable Privatization Plan To Exit Mitchell Lama Program Says RIOC President - Terms Not Disclosed Yet And Status Of Retail Lease Renewal Unknown

As reported almost one year ago on March 28, 2017:

Six months after approving an affordability plan to exit the NY State Mitchell Lama housing program, residents of Roosevelt Island's Westview building are worried that no final agreement has been reached between the Westview building owner/sponsor (North Town Phase 111 Associates LP) and various NY State government agencies, including the Roosevelt Island Operating Corp (RIOC), NY State Homes & Community Renewal (HCR) and the Empire State Development Corp.

As of last week, there was no word about the status of Westview privatization.

A possible obstacle - the expiration in April 2018 of Westview retail space lease to RIOC which is subleased to Hudson Related as part of the Main Street Retail Master Lease.

Would the Westview building ownership renew the retail lease space to RIOC or,would  Westview ownership recover the space for themselves and to what extent does the retail lease negotiation impact the privatization negotiations?

In response to my question last Friday about the Westview Privatization status, a spokesperson for Roosevelt Island's NY State Assembly Member Rebecca Seawright replied:

Assembly Member Seawright continues to work with State Homes and Community Renewal (HCR) and the Westview Taskforce. A meeting is being held in the district office today with Westview Task Force leadership and HCR officials to discuss the status of negotiations.

I asked RIOC President Susan Rosenthal and HCR Commissioner RuthAnne Visnauskas:

... As far a the Roosevelt Island community knows, nothing more has happened regarding Westview Privatization since this March 2017 story describing stalled negotiations.

The Westview residents have no idea what is going on.

My understanding is that the latest element in Westview privatization is the upcoming expiration in April 2018 of the Westview ownership retail space to RIOC which is subleased to Hudson Related as part of the Roosevelt Island Main Street Master Retail Lease.

What impact, if any, does the Westview ownership retail lease renewal negotiation with RIOC have on the Westview Building privatization?

What is the current status of Westview privatization?...

Ms.Rosenthal replied on yesterday:

I know you reached out to HCR and are anxious to know the terms of the proposed deal.  As soon as we share the terms with the board members,  we will share them with you.  The good news: we reached a deal in principle and we are moving forward!

I asked David Kramer of Main Street Retail Master Leaseholder Hudson Related about the Westview retail space lease renewal:

... My understanding is that the lease has not been renewed yet.

If Westview retail lease with RIOC is not renewed, what impact will that have on the Master Retail Lease with Hudson Related which includes the Westview stores?

Also, what impact will that have on Roosevelt Island retail leasing efforts and those current Westview retailers that have lease terms past April 2018?

What is the annual rental revenue from Westview retail tenants and how much revenue does RIOC receive under the Master Lease from Westview retail tenants?...

Mr. Kramer answered:

I think there are 2 substantive issues if the retail sublease is not extended.

First, it's a big hit to RIOC. They earn most of the revenue from the Westview stores (we earn a percentage of the upside over time).  I'm not sure why anyone would want RIOC to have less recurring, annual money.

Second, I think there's a logic to the Master Lease having a greater point of view to help the island. Whether it's paying for the new way finding system, or holiday lights, we've tried to help all the retailers.

We've made plenty of non-economic choices, whether it's signing a lease with NYPL or working to keep RIVAA in their space that are good for the island but don't maximize profits.

Our JV pays them ground rent from the retail revenue plus profit participation ... it comes out to approx. 83% of net proceeds. So I don’t understand why the RIOC Board wouldn’t fight to retain that revenue source.

Westview building owner David Hirschorn declined to comment on the Westview privatization status or the retail lease renewal at this time.

The Westview Task Force sent this notice out last evening to residents:

Friends, Neighbors, Westview Tenants,

We are pleased to report that we met with HCR officials and representatives of our elected officials this past Friday.

We were informed that, after prolonged negotiations, the agencies (HCR, RIOC) and Owner are now on the same page regarding all terms related to the WV Affordability Plan. Details are expected to be formalized and released soon.

We will keep everyone informed as we learn more.

Thank you for your continued support.

Westview Taskforce Inc.

Below is an excerpt from a November 3, 2017 email from the Westview Task Force to HCR Commissioner RuthAnne Visnauskas supporting the return of Westview retail space to the Westview Building ownership (click text image for larger sized print).

Today, RIOC announced that the Real Estate Advisory Committee will meet April 3 in Executive Session (closed to the public) to discuss Westview as well as an apparent settlement of Rivercross ground lease arbitration. According to RIOC:

PLEASE TAKE NOTICE that a meeting of the Real Estate Development Advisory Committee of the RIOC Board of Directors will be held on Tuesday, April 3, 2018 at 5:30 P.M. at the RIOC Administrative Office, 591 Main Street, Roosevelt Island, New York.

Agenda:

1. Chair’s Motion for Executive Session to Discuss:

a. Rivercross Arbitration Settlement

b. Southtown 8 & 9 Environmental Assessment and Zoning Overrides

c. Westview Ground Lease Negotiations

2. Any Other Committee Business That May be Brought Before the Committee.

My understanding is that if the Westview retail space lease to RIOC is not renewed, the current retail tenants will have to renegotiate their agreements with Westview owner.

Roosevelt Island Resident Says Westview Pool Sauna Taken Over With Roaches - Building Management Inspects Area, Says No Infestation And Employs Weekly Extermination Services

A Westview resident reported last Saturday:

I don’t know who to report to but I joined the Westview pool only to discover the sauna infested with roaches, completely taken over! When asked, I was told ; it’s common knowledge and in the men’s room also. I was told they can’t spray in the saunas because of toxic fumes.

The pool should be shut down until this infection is completely clear. It puts all Westview residents in jeopardy! Why is no one reporting? It’s a health hazard!...

 Image Of Re-Opened Westview Pool In 2014

I forwarded the message to Westview management. According to Westview Management:

Since receiving your email we immediately investigated the pool area, sauna and locker room - there is no infestation.

In fact, we had building staff inspect these areas on multiple occasions at multiple times and except for one inspection in the early morning when 1 roach was observed, no roaches were observed.

The super and I also frequently inspect the pool and related areas and have never observed a problem nor have we received other complaints. The building has weekly exterminating service and the pool area and sauna is treated as part of this service.

We will continue to monitor the pool and sauna area and we have also relayed the anonymous complaint to our exterminating company who will do a special treatment on the sauna.

Image Of Newly Re-Opened Locker Room in 2014

The resident followed up yesterday:

Looks like they sprayed, a temporary fix! Found 3, dead or close to it.

Nice to have a pool and sauna in your building - as long as it is properly maintained.

SPONSORED POST - BEST WISHES FOR A HAPPY HOLIDAY FROM ISLAND HOUSE & WESTVIEW

Best Wishes For A Happy Holiday from Island House & Westview.

Roosevelt Island Westview Ground Lease Negotiations Stalled Delaying Building's Exit From Mitchell Lama Program - Residents Worry About Fate Of Affordability Plan, What's Going On?

Six months after approving an affordability plan to exit the NY State Mitchell Lama housing program, residents of Roosevelt Island's Westview building are worried that no final agreement has been reached between the Westview building owner/sponsor (North Town Phase 111 Associates LP) and various NY State government agencies, including the Roosevelt Island Operating Corp (RIOC), NY State Homes & Community Renewal (HCR) and the Empire State Development Corp.

As reported October 3, 2016:

The last remaining Roosevelt Island Mitchell Lama building, Westview,

took another step closer to privatization and exiting the NY State affordable housing program this weekend with the residents approving an affordability plan negotiated between their representatives, the Westview Task Force  (WTF) and building ownership....

and:

... The Westview Task Force added that the Affordability Plan has the support of local elected officials, NY State Homes & Community Renewal and the Roosevelt Island Operating Corp (RIOC). RIOC is expected to approve an extension of the Westview Ground Lease through 2068 during its January 2016 Board meeting....

 Image of September 22 WTF Affordability Plan Informational Meeting

Roosevelt Island's NY State Assembly Member Rebecca Seawright supported the Westview affordability plan and had this statement:

... Westview is the last building remaining in the Mitchell-Lama program on Roosevelt Island and will exit with an affordability plan supported by Assembly Member Seawright. Seawright acted on the numerous concerns raised by her constituents and worked with public officials Congresswoman Carolyn B. Maloney, Senator Jose M. Serrano, Manhattan Borough President Gale A. Brewer, NYC Council Member Ben Kallos and New York State Homes & Community Renewal’s Commissioner James S. Rubin to ensure the affordability plan was fair for all. The proposed plan, which was overwhelmingly approved, protects Westview residents who chose to continue to rent rather than purchase. The affordability plan specifically protects residents on fixed incomes who simply cannot afford to purchase their apartments or pay market rent. At the same time, this is an opportunity for many middle income Westview residents to become first time home buyers at affordable purchase prices...

But, to date, the Westview building owner/sponsor and the NY State agencies have not reached a final agreement leaving the residents worried and the fate of their homes unknown.

I spoke with Westvew owner/sponsor David Hirschhorn about the current status of the Westview affordability plan and exit from the Mitchell Lama program. According to Mr. Hirschhorn:

The Affordability Plan is essentially a very detailed term sheet that sets forth all of the details for how Westview will withdraw from the Mitchell Lama Program and how it will operate following Mitchell Lama withdrawal. It is modeled on the Island House Affordability Plan and includes: (i) the purchase price to be paid by tenants who elect to purchase their apartments, (ii) the rent to be paid by tenants who elect not to purchase their apartments, (iii) the ground rent and transfer fees to be paid to RIOC, and (iv) the payments in lieu of real estate taxes to be paid to ESD.

Following the Island House template, the Westview Affordability Plan was the product of many years of negotiation and compromise between the Sponsor and the Westview Taskforce. DHCR was involved in every step of these negotiations and used its good offices to ultimately bring the parties together resulting in the Westview Affordability Plan Dated September 1, 2016 - FINAL. The agreed upon Final Affordability Plan was then overwhelmingly approved in a tenant referendum on October 3, 2016. The economic terms were carefully balanced and reflect substantial concessions; therefore, any change will have a ripple effect resulting in multiple changes. Its very complicated.

The sponsor and RIOC were to finalize the Ground Lease extension using the Island House Ground lease as the Westview template. The final approved Westview Affordability Plan provided for the same ground rent and the same transfer fees agreed to by RIOC in Island House to be incorporated in Westview. The Westview Affordability Plan actually states:

This Affordability Plan contemplates the execution of a formal Ground Lease Modification Agreement incorporating the terms of this Affordability Plan. The Sponsor and the New York State agencies agree to cooperate with one another in a good faith effort to prepare and execute such Ground Lease Modification Agreement (and the Sponsor-RIOC Sublease herein described) as expeditiously as reasonably possible.

All of this was supposed to have been completed by January 31, 2017 because effective February 1, 2017, the Affordability Plan provides that the purchase price paid by Westview tenants increases (with additional increases each month thereafter). The Sponsor deferred the February increase, but the March 1st increase is effective. The next increase will take effect April 1st.

I presume RIOC is evaluating whether it will proceed with the ground lease extension on which the Affordability Plan was based (the same as RIOC agreed to in Island House) and approved by Westview Tenants, or whether it will instead require a greater ground rent to be paid by the Coop (which would require that the monthly maintenance fees be increased that could result in the coop not being viable and thus the failure of the entire deal), and/or higher transfer fees from the Sponsor and tenants when apartments are sold. As noted above, any change in one provision beyond what was carefully negotiated, such as an increase to the Sponsor, would result in other changes, such as an increase in the purchase price to be paid by tenant purchasers.

Without a ground lease extension there cannot be a cooperative conversion and tenants would not be able to become homeowners. Remaining a Mitchell Lama is not an option and so Westview would become a market rate rental building. This would be a most unfortunate result.

All of the New York State agencies (RIOC, DHCR & ESD) need to finalize the Westview Ground Lease Extension substantially in the form that these same agencies signed for Island House. This could be done very quickly since the form is actually included in the Westview Red Herring which all of the agencies have had since its filing in 2015. ESD has already stated that they are prepared to move forward using the Island House documentation. So its really up to RIOC and DHCR as to whether they will proceed as provided in the Final Affordability Plan.

I am cautiously optimistic. I believe that RIOC and DHCR are carefully considering what is at stake and they are certainly aware of what was agreed to and the economic terms that everyone (tenants and sponsor) relied upon in compromising upon a final consensus back in September. I do believe they are working hard to make the Westview Affordability Plan a reality. It would be most unfortunate to now upset the apple cart. Island House was a smashing success and as the Sponsor, I would hope that we can replicate and bring that success to the Westview Tenants. Both the Sponsor and the Westview Taskforce desire to conclude the Westview Ground Lease Extension as originally contemplated without further price increases to the Westview Tenants. With interest rates rising, it would be good for the Westview Tenants to get this done very soon.

The Westview Task Force representing building residents issued this March 20 statement:

We were unpleasantly surprised and very disappointed that the effective date of the Westview Affordability Plan did not materialize at the end of January, this after the agencies assured us that a January effective date was achievable as long as we came to an agreement with the Sponsor and demonstrated Tenant support for the Plan. An overwhelmingly positive vote by Tenants was delivered at the end of September 2016 moving the Plan forward for final approval by the agencies.

We have not been provided with any specifics related to the new demands put on the Sponsor by the agencies and we are not part of any negotiations. Therefore, we are not in a position to comment on the status of such negotiations. We have, however, clearly expressed to the agencies and Sponsor our concerns with any potential outcome that might adversely affect the affordable preservation of our homes, and our position that any such adverse outcome would be unacceptable.

We remain hopeful that the affordability terms as of the promised January effective date will be retained and quickly approved by the agencies.

RIOC President Susan Rosenthal responded to my inquiry on status of Westview affordability plan and ground lease extension saying:

RIOC is working in concert with HCR and ESD to negotiate with the Owner. We remain hopeful that the parties will reach agreement. 

The last public statements by RIOC on the subject of Westview ground lease extension and affordability plan occurred during the October 13, 2016 Real Estate Advisory Committee meeting. RIOC President Rosenthal reported to the Committee:

We had a meeting with the Task Force at their request and we also had conversations with Hirschhorn before the vote and I indicated to both groups that we are having an appraisal.  It is very possible that the rent proposed by us will be higher than the Island House rent based upon the increase in market value and they should know that before going forward....

... We're not going to agree to an amount that's not based upon the market value....

RIOC Director Margie Smith added:

There's just so many variables. It is similar to Island House but certainly not the same building. There are so many issues that one building has and not the other one. We should have been involved all along in this, certainly before they voted....

Ms. Rosenthal replied:

HCR did not look at the affordability plan before the vote. ESD has not looked at the TEP payment before the vote. I'm not sure why it was done in this chronology.

Here's portion of the Real Estate Advisory Committee discussion



and the full discussion.



Information on the Island House Mitchell Lama exit here and Rivercross exit here.

Island House Mitchell Lama exit was under an affordability plan, Rivercross Mitchell Lama exit was a market rate plan.

There is currently an arbitration under way between RIOC and Rivercross regarding the Rivercross ground lease extension fee. Not currently known if the Rivercross ground lease extension arbitration effects the Westivew ground lease negotiations.

Westview residents are very worried.

UPDATE 4/11 - NY State Assembly Member Rebecca Seawright adds:

It is in everyone's best interest that Westview exit from the Mitchell Lama program ensures affordable housing for Roosevelt Island residents. We have come so far in negotiations, and I will continue to work with DHCR, ESD, RIOC and the Westview Taskforce to maximize the benefit for the residents. At this time, negotiations are still in progress and there is every reason to believe that the final plan will be affordable and fair for all.