Cobble Hill Towers: 30% Buying/Being Bought Out
Yesterday a press release went out saying a “negotiated settlement” at the historic 188-unit Cobble Hill Towers on Hicks Street means “residents will be able to purchase their units at a substantial discount, and it is expected that over 30% of the residents will purchase their units or agree to a buyout.” It also said…
Yesterday a press release went out saying a “negotiated settlement” at the historic 188-unit Cobble Hill Towers on Hicks Street means “residents will be able to purchase their units at a substantial discount, and it is expected that over 30% of the residents will purchase their units or agree to a buyout.” It also said around a quarter of the buildings’ apartments will be available for market-rate sale. (Corcoran’s current listings for the building are running from $315,000 for a 410-square-foot studio to $577,500 for an 860-square-foot two-bedroom.) Developer Hudson Companies (of the Third & Bond blog) entered into a joint-venture agreement with the towers’ longtime owner nearly three years ago. According to a spokeswoman for Hudson, the insider discount for tenants in the building buying units is around 30 percent off the market-rate prices and the apartments that aren’t being sold to tenants or put on the market will continue to be rented until they’re vacated; as that happens, they’ll be renovated and put up for sale.
Condo Plan Approved at Cobble Hill Towers [Brownstoner]
Cobble Hill Towers Condo Plan Drops [Brownstoner]
Exclusive: Hudson To Partner on Cobble Hill Towers [Brownstoner]
In a recent article in The Brooklyn Paper, one renter notes, “They [the Hudson Companies] seem to be avoiding as much work as possible†Mr. David Kramer’s response to that is: “Not true.†Mr. Kramer’s imputation of untruth is disingenuous, especially when in the next breath he claims that his company has “already invested $2 million dollars in repairs, including improving security with new gates, and renovating the courtyards and lobby areas.†He himself told the tenants that his vaunted security improvements cost about $150,000. And though the new lobbies are attractive, neither they nor the garden landscaping and concrete garbage container pads were particularly costly. So where has his reported $2 million gone?
NONE of his “improvements†have addressed critical issues like the condition of the roofs, the deteriorated bluestone stairways (down which one elderly tenant tumbled), the dangerously unstable parapet walls hanging over the adjoining Warren Mews properties, and the cast-iron portions of what the NY Times calls the “distinctive wrought-iron breezeways and features.†The tenants themselves had to force him to undertake an adequate survey of the condition of the fire escapes. For over a year he has refused to repair the second floor walkways of the 140 Warren building, where without Landmarks Commission permission he had the bluestone torn out in a failed attempt to replace it with concrete. Furthermore, the comprehensive window plan he slipped past the Landmarks Commission shifts the costs of replacing the many damaged window inserts that the tenants’ Engineer’s Report documented onto apartment occupants and future buyers, while conveniently ignoring the replacement cost of the wooden window surrounds, which will certainly cost half again as much as the inserts themselves.
The only way Mr. Kramer can have invested anything like $2 million dollars in the Cobble Hill Towers complex is if his calculations include monies spent on lawyers fees for the preparation of the red herring and offering plans he developed, renovations of the approximately 30 apartments he has caused to be vacated (most of which he can write off as business expenses), two years of wages for Cobble Hill employees, lawyers fees for his “negotiations†with tenant buyers, fees for the preparation of the window plan he submitted to the Landmarks Commission, and perhaps the cost of the heating oil he was forced to buy last winter.
“According to a spokeswoman for Hudson, the insider discount for tenants in the building buying units is around 30 percent off the market-rate prices and the apartments that aren’t being sold to tenants or put on the market will continue to be rented until they’re vacated; as that happens, they’ll be renovated and put up for sale.”
As for that 30% discount that they are claiming to be using for the offering to existing tenants, my apartment lists as $560 at an outsider price. That should be an insider price of $372 . My insider price is approximately $450 . So much for being able to trust the word of Hudson.
I guess my main concern, beyond keeping an affordable roof over my family’s head, and not loosing the wonderful eclectic collection of people we have here, is that there are still several people who are in rent controlled (yes CONTROLLED) apartments. Some of whom have been given the impression that they will not be able to renew leases. This is a crime.
These buildings stand for those who are a little different and lot tolerant. CHT is a special place that should not be lost to those who would not only look down on the former residents but on the heritage of fairness and balance these buildings represent.
I am a resident of CHT and have been for almost 10 years. As others have said, I love the neighborhood, my neighbors and the buildings. At the rent stabilized rate, you probably can’t find a better place to live in Cobble Hill. At the rent stabilized rate is the key. The insider price for our unit is about 20% below the price to outsiders, not 30 as Hudson is claiming. It’s definitely not “30% off the market rate”. The market rate is what people are willing to pay and nobody really knows the market rate for these units because to my knowledge, Corcoran hasn’t made any sales of the currently vacant units (which have been on the market for a while, just look on zillow.com and you’ll see some of the units listed there). Some of the apartments are dumps, some are much nicer, as you would expect in a building this old and with such a wide variety of tenants. The sqaure footage is definitely overstated as is common. Expect about 15% less than what is advertised. The heat is terrible. The apartments have NO insulation between the brick and sheetrock. The water situation is dicey (it’s the classic situation where water pressure in one unit is affected by use in other units). The fact is though that for the most part you can’t buy an apartment in cobble hill, for close to what the insider prices are (a two bedroom ranges from about $370K to $500k). As for as Hudson. From day 1 they have been a bit shady. Getting information from them has been incredibly challenging and negotiating with them has been a joke. If they had been more forthright with current tenants and been more flexible, they probably would already have enough units in contract to make the plan effective. In my humble opinion, for insiders it still is an opportunity to own in Cobble Hill if you are in it for the long haul. Becuase as somebody else posted, resale could be difficult due to what will most likely be a low number of owned units over the next few years. I’ll leave it at that for now, I could write pages about what’s gone on here this past year.
@sen – not just “buyer beware,†but “renter beware†as well. A young woman was told by Hudson they had a rent-stabilized apt and they gave her a 6 month lease (which is illegal. RS leases have to be for at least one yr). She moves in and 6 months later gets her new lease, which is now $500 higher. She complains to Hudson and is told they’ll only jack it $300 if she signs a buyers agreement. She refused and signed another 6 mo lease w/the $500 hike, and moved out when her lease ended this past summer. This is Standard Operating Procedure for Hudson. I’m sorry you had such a crappy experience with them; most of us have as well.
Regarding buyouts: has anyone here ever heard of getting bought out but not getting paid until a year later? Hudson claims they don’t have the money to pay tenants should there be a mass exodus, but only about a dozen people expressed interest in buyouts a few months ago (partly because the buyout offers were so low). It’s doubtful that the 12 people were all going to move out at the same time, and we begged Hudson to pay buyouts as people moved out. They refused. Tenants taking buyouts are giving up rent-stabilized apts and hoping that 6 or 8 or 12 months down the line, Hudson will mail them their check, wherever they’re living by then. Finally, if Hudson doesn’t have the money to pay 12 buyouts, what are they doing “developing†a landmarked 186-unit complex??
Thank you to all “insiders” for the informed details. This is what Brownstoner does best.
Potential buyers are advised to trust Hudson at their own peril. We were one of the (many, I’m sure) former tenants who experienced an astronomical rent hike just one year after we moved into a deregulated CHT unit, just above the $2K cap. Management claimed “market rate” but let’s get real here – they were forcing out renters to chalk up more empty units to put up for sale. Legal, sure, but scheisty, no doubt. Now they have empty apartments sitting there gathering dust. Look around on Curbed, Brooklyn Paper, etc and you will see former tenants in the same discouraging position. Just developers being developers, I guess. The doublespeak regarding CHT’s important place in history makes the whole situation even sadder.
Those of you interested in the Cobble Hill Towers conversion really should read the comments thread posted on The Real Deal. There seems to be some confusion as regards what the developer is claiming and the situation as the insiders view it.
Furthermore, it seems disingenuous to claim that “it is expected that over 30% of the residents will purchase their units or agree to a buyout” since “buyouts” have no effect on pushing the conversion towards completion. The developer still has to sell 15% of the “occupied units” before the conversion can go through, and at the moment that doesn’t seem likely.
I first saw Cobble Hill Towers about 25 yrs ago and fell in love with them. I’ve been lucky enough to live here for some years now. But as beautiful as these buildings are on the outside, they’re an absolute mess inside. Not just individual apts, but the buildings themselves need a lot of work (roofs, windows, brick work, etc).
“30% buying or being bought out†is a lie. 30% of tenants were interested when Hudson first floated their proposal, but dealing with them for the past 2 years has been a nightmare. Only a handful of tenants are still interested in purchasing. As it stands, they may not even have the requisite 15% needed to declare the plan effective.
Had Hudson negotiated in good faith, more tenants would be signing contracts right now. But they’ve lied to tenants every step of the way, promising x and y, then reneging. Over and over again. They’ve actively worked to rid these buildings of long-time tenants (most of whom are/were rent-stabilized). There were 5 vacant apts when Hudson sent out their red herring – there are now 40 empty units.
Saying that the insider prices are “30% off market rate†is another lie. Since the red herring, many of us felt the “insider†prices were too high, but we assumed they’d come down a little as negotiations commenced. No such luck. Hudson conceded practically nothing to the tenants of CHT while threatening hefty MCI increases every step of the way.
Even on buyouts, Hudson gave no ground: the terms of the deal state that those who take buyouts have to wait an entire year for their money. I’ve never heard of buyouts where you *don’t* have money in hand as you walk out the door.
They tore up the beautiful blue stone walkway on the 2nd floor of 140 Warren St over a year ago before realizing the ironwork wouldn’t support the cheap cement they wanted to use. There’s just a sheet of plywood on that walkway now, supported by shoddy wooden scaffolding. If you live nearby, go check it out: 140 Warren St, just before you come to Hicks St.
For the Offering Plan, Hudson had a shady architect do a quick walk-thru, attesting that everything was in “good†condition. They claim to not have an Engineer’s Report – who buys 130 yr old historic, landmarked buildings *without* an Inspection? The tenants were forced to raise $8000 this summer to pay for an Engineer to properly inspect the complex. Hudson says the buildings are in “good†condition; our Engineer says it needs $6M worth of repairs in the first year alone (including replacing all 9 roofs).
I love these buildings and I love this neighborhood, but anyone who buys at these prices (and anyone who trusts Hudson) is a fool.
A nice, starter apartment should cost about $350K.