Tuesday, April 20, 2010

After low-balling Goldstein on condo value, ESDC (via consultant) suggests comparable condos from lawsuit-plagued complex

Maybe it is getting a little personal.

Not only have the Empire State Development Corporation (ESDC) and its real estate consultants low-balled Atlantic Yards uber-opponent Daniel Goldstein regarding the value of his Pacific Street condominium, the only alternative apartments it has shown him are either part of a lawsuit-plagued complex or very close to the Atlantic Yards construction zone.

And while the ESDC's consultant provided a list of only five condos, a simple search of a real estate web site turns up dozens of potential purchases in Prospect Heights and adjacent neighborhoods.

The alternative apartments are listed in an affidavit that's part of an ESDC package of legal papers aiming to convince state Supreme Court Justice Abraham Gerges to evict all condemnees from the Atlantic Yards footprint by May 17. A hearing will be held Wednesday at 9:30 10 a.m. before state Supreme Court Justice Abraham Gerges at Supreme Court in Brooklyn, 320 Jay Street.

Standoff

Goldstein, the spokesman for Develop Don't Destroy Brooklyn (DDDB), and his family are the last remaining occupants of a 31-unit condo building at 636 Pacific Street, a former warehouse converted in 2002.

The condo is in a crucial spot on the arena block, and Forest City Ratner, which is funding the condemnations, wants him out of there as soon as possible so his building can be demolished for construction.

So it would be in the interest of the state and FCR to ease his departure as quickly as possible, with an offer closer to market price and a longer list of alternatives. That hasn't happened.

Low-ball offer

Let's recap. While Goldstein in 2003 paid $590,000 for a 1290 square foot apartment, the state has made a preliminary offer of only $510,000, less than half (on a square foot basis) of what Forest City Ratner offered more than four years ago.

That's based on an appraisal that hasn't been released.

According to Gerges's March 1 order, the condemnees must file written claims for real property no later than September 1. So the final value doesn't have to be worked out before a condemnee leaves--but the state will have to convince the judge they're making progress.

Relocation help

The ESDC, according to an affidavit from ESDC attorney Charles Webb, "has made substantial and continuing efforts to provide relocation assistance to the Occupants," including, via its consultant, the Cornerstone Group, "information about comparable replacement locations to consider as potential replacement sites for their residences or businesses."

Cornerstone, however, has offered Goldstein just five "alternative condominiums. All are far more expensive, on a per square foot basis, than his condo, as preliminarily assessed by the state. (Click on graphic to enlarge.)


Here's coverage and criticism in The Real Deal of the publicity-shy Cornerstone.

The Newswalk

One apartment, at 535 Dean Street, is about 95 square feet larger than Goldstein's current apartment, plus a 300 sf deck, for $869,000. Beyond that, the $1,170 monthly common charges are more than double what Goldstein is now paying, according to a letter included with the order.

Newswalk, whatever its charms, would not be much of an oasis. It's across the street from the Vanderbilt Yard and the site of future construction.

Meanwhile, construction vehicles and, ultimately, arena-goers, would stream west past the building on their way from a massive interim surface parking lot to the arena block.

Hello Living

The other four units, in three different buildings, are all part of the controversial Hello Living complex on the border of Prospect Heights and Crown Heights, on Dean and Pacific streets between Washington and Grand avenues.

That location is much farther from transportation and shopping than Goldstein's current apartment on Pacific Street between Fifth and Sixth avenues.

The least expensive unit, at 965 square feet, would cost $579,000. That condo is significantly smaller than Goldstein's current apartment, but some $70,000 more costly than the state's current valuation.

Whatever the price, buying at Hello Living might be a dicey proposition. As the New York Times reported in a 2/13/10 article headlined Families See a Utopia Turn Into an Ugly Legal Fight :
The Hello Living condo project in Brooklyn was marketed as an urban utopia, a collection of low-rise apartments designed for young families without large inheritances or bonuses.

...The first sign that something was not right came last fall, when fliers appeared outside one open house saying, “Buyers Beware” and “Buying an Apartment in This Building Will Likely Get You Sued.” Lawyers started calling people who had already made down payments to issue the same warning, and at least two people discovered that their banks had withdrawn their loan commitments.

Then the lawsuits arrived, and even some families who had already closed and moved in found themselves on the defense.
In court Wednesday

Expect some vigorous discussion in court Wednesday before Gerges regarding the ESDC's application.

Beyond the valuation issue, the ESDC claims that it can't make an advance payment to Goldstein for his apartment until two liens are paid, regarding taxes and a water bill, totaling nearly $5000.

His lawyer Michael Rikon (disclosure) says Goldstein is not responsible for the entire building and has paid his monthly maintenance charges.

Beyond that, the ESDC charges that Goldstein and others have not paid monthly use charges since the ESDC took title to their properties. Rikon says a condemnor may not charge any use and occupancy for a residential tenant for 90 days.

Rikon and other attorneys representing condemnees will file response papers with Gerges tomorrow.

Order to Show Cause ESDC, Atlantic Yards Condemnation Case

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