West Village Houses debates whether to buy
By Albert Amateau
The tenants association of West Village Houses is nearing a possible deal with the owners to buy the complex that was built 30 years ago through the efforts of Village activists including Jane Jacobs and Rachele Wall. The association hopes to organize an affordable limited-profit co-op.
A meeting on April 7 conducted by Katy Bordonaro, tenant association president, and Carole Ule, the associations attorney, attracted about 200 residents who remain divided over whether tenants would be able to structure a deal that would give all residents the option to either buy into the co-op or continue as middle-income renters.
The meeting was closed to reporters. (Its a private meeting with my clients, Ule told a Villager reported who attempted to attend.) But some residents spoke later on condition of anonymity. The bottom line is affordability whether the price we pay the landlord will allow us to organize a co-op thats affordable and allow middle-income residents who dont buy to rent their apartments, said one resident.
We offered $57 million nearly two years ago but the owners dismissed that immediately, said one longtime resident who declined to say what the tenant associations current offer is.
In June 2002, the owners, West Village Associates, a partnership that includes Alexander Farkas and the real estate firm C.B. Ellis, moved to take the complex of 42 six-story buildings with 420 apartments out of the Mitchell-Lama rental program and raise rents over a two- or three-year period to market rate. The proposal, recalled one resident, was to double rents after one year and triple them the following year.
Under the Mitchell-Lama program, supervised by federal and state or city housing agencies, owners are allowed to buy out of the program after 20 years by prepaying the low-cost mortgage and foregoing the tax benefits of the program. West Village Houses still has a $38 million mortgage outstanding, according to one tenant.
Unlike Independence Plaza North, the Mitchell-Lama rental complex in Tribeca with 1,329 apartments, West Village Houses tenants are not eligible for federal Section 8 subsidies or enhanced vouchers to help keep rents affordable.
Mitchell-Lama rental projects coming out of the program that were built before 1974 enter the city and state rent-stabilization system for a period of eight years, with rent increases typically four or five percent set annually by the city Rent Guidelines Board.
But West Village Houses, which extends from Bank St. to Morton St. between Washington and West Sts., was built in stages. Some buildings on the south end at Morton St. were complete in the summer of 1974 and others, on the north end at Bank St., were completed later. Indeed the complex was conceived as a community-based co-op, but rising construction costs made them more expensive than planned and failed to attract enough buyers. The project went through more financial convolutions before being acquired by private owners in 1976 as a Mitchell-Lama rental development.
The tenants association contended in 2002 that West Village Houses was eligible for rent stabilization, while the owners said the 1976 Mitchell-Lama date put the complex outside of the rent-regulation system. In January, 2003, the tenants association filed a lawsuit in State Supreme Court to settle the issue, and last month, State Supreme Court Justice Shirley Kornreich sent the issue to the state Division of Housing and Community Renewal, where it is still pending.
Thats a big factor thats driving the tenants association board of directors and the owners to negotiate none of us want a decision thats adverse, said one tenant. If the complex were under rent stabilization, rent increases would be manageable for several years, the tenant added.
But one possible ruling might be that the buildings on the south end would have rent protection while the ones on the north would be allowed to rise to market rate. That raises a moral issue would we want to allow half of our neighbors to be evicted because they couldnt afford the rent increases, said a resident of the complex since 1976.
About 13 percent of the tenants are city, state or federal employees and 21 percent work for nonprofit organizations, according to a tenant survey two years ago. The median annual income per family at that time was $65,000. The tenant living in the building since 1976 pays $1,200 a month for a two-bedroom apartment. It was $576 a good many years ago, he recalled.
Back then, the West Village was dominated by industrial buildings and deteriorating tenements. I lived across the street from a Yellow Freight truck yard, one resident recalled, Now its the Morton Square apartments and the Olsen twins will be my neighbors.
Looking beyond the tenants attempt to buy the complex, the association will have to convince at least 50 percent of the families to buy into the proposed co-op, which would bear the cost of maintaining moderate-rent apartments for current residents who do not want to buy. A week after the April 5 meeting, flyers were being posted on the bulletin boards of some buildings urging residents not to sign onto a purchase agreement.