Lawmakers are reviving their fight to limit rent increases on ground lease co-ops.
Last year, in the final days of the legislative session, Sen. Liz Krueger amended a bill that would restrict ground-lease rent increases and grant co-op shareholders the right to renew the lease.
Despite that 11th hour momentum, the bill did not pass last year. Still, it was clear that supporters of the measure were not backing down from the fight — especially those whose ground lease is expiring in March of this year. The co-op board at Carnegie House has supported the legislation, and has sued to delay the reset of their ground lease, where the owners initially wanted to raise the rent from $4 million to $40 million, according to a lawsuit filed by the board. Court filings indicate the owners subsequently pitched $25 million, which is where the offer still stands, according to a source familiar with negotiations.
The parties are in arbitration, after a judge struck down the board’s attempt to halt the talks.
Opponents have argued that the measures wrongfully interfere in private contracts and provide a windfall for wealthy co-op shareholders who were able to buy their buildings at a steep discount because of the ground lease arrangement. (Supporters say many co-op shareholders are middle class.)
“Instead of focusing on the mountain of pressing issues faced by every day New Yorkers, policymakers have chosen to try — again — to legislate a windfall for some of the wealthiest New Yorkers while throwing contract law into chaos,” Real Estate Board of New York’s Zach Steinberg said in a statement.
Krueger and Assembly member Linda Rosenthal just reintroduced their bills in their respective chambers. In a statement, Krueger said the bill will “address the legal gaps facing ground lease co-op residents and provide much-needed protections.”
Here’s what these bills seek to do:
— Cap annual increases on ground rent at 3 percent or the Consumer Price Index, whichever is greater.
— Give shareholders the right to renew their ground leases on the same terms as their existing agreement for up to 30 years.
— Give the right of first refusal if the landowner decides to sell the underlying property. It would also override provisions in ground leases that prevent shareholders from borrowing money over certain thresholds.
What we’re thinking about: In her executive budget, Gov. Kathy Hochul has proposed extending the state’s millionaire’s tax. What do you think of that proposal, and what do you wish the governor included? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: Get ready for the corpse flower! The flower, whose odor has been compared to rotting flesh, is expected to bloom in the Brooklyn Botanic Garden by the end of the week, Gothamist reports. Yay!
It seems right that a flower that smells like death would bloom in the bleakest of months, to attract pollinators that feed off carrion, only to collapse after a few days, leaving its petals to rot. Ah life!
Corpse flowers only bloom every 10 years. Does that mean a death flower stinking up botanical gardens at this particular moment is an omen? I leave that to you.
But people are so psyched about a corpse flower in Sydney that they have named it Putricia.
Elsewhere in New York…
— A City Council bill seeks to prevent certain members of a mayoral administration from lobbying City Hall right after leaving their government job, Gothamist reports. The bill would bar any public servant who reports directly to the mayor, including the chief of staff, deputy chief of staff, chief advisor, chief counsel, press secretary and communications director, from taking city lobbying gigs for two years after leaving City Hall. The mayor’s former chief of staff, Frank Carone, left office after a year and quickly began lobbying.
— President Donald Trump’s pick for interim U.S. attorney for the Southern District of New York shot down Mayor Eric Adams’ argument that his criminal case was the result of political retaliation from the Biden administration, Politico New York reports. In a new court filing, interim U.S. Attorney Danielle Sassoon wrote that the mayor’s allegation “disintegrated when discovery made clear that the investigation into Adams began more than a year earlier, based on concrete evidence that Adams had accepted illegal campaign contributions.”
— ICYMI: Adams further fueled speculation that he could switch political parties during an interview with Tucker Carlson at Gracie Mansion, City & State reports. At one point, Adams noted that people are saying that he no longer sounds like a Democrat, that he seems to have left the party. “No. The party left me, and it left working-class people,” he said.
Closing Time
Residential: The priciest residential sale Wednesday was $9.5 million for a 2,550-square-foot condominium at 165 Charles Street in the West Village. Christopher Kromer and Nora Ariffin of Brown Harris Stevens had the listing.
Commercial: The most expensive commercial closing of the day was $127.5 million for a 186,800-square-foot apartment building at 88 Richardson Street in North Williamsburg. UDR sold the 188-unit property to Pacific Urban Investors.
New to the Market: The highest price for a residential property hitting the market was $10.5 million for a 4,060-square-foot condominium at 285 Lafayette Street in Nolita. Compass’ Nick Gavin Properties has the listing. — Matthew Elo