The Stew­ards of Seward Park

Why Did a Lower East Side Com­plex Turn Down $54 Mil­lion?

Forward Magazine - - FOREGROUND - By Josh Nathan-Kazis

The phone call in­form­ing Rob Ka­liner that an old apart­ment com­plex on Man­hat­tan’s Lower East Side had re­jected his $54 mil­lion drove hi­mout of his of­fice and onto the side­walk, where he started walk­ing and didn’t stop.

“I did like 26,000 steps,” Ka­liner said days later, still reel­ing from one of the most star­tling re­jec­tions in the whole florid his­tory of New York City real es­tate. “My car­di­ol­o­gist told me to do 10,000. She would have been proud.” Ka­liner is the owner of the gut­ted shell of the Bi­a­lystoker Cen­ter for Nurs­ing and Re­ha­bil­i­ta­tion, an Art Deco land­mark of the Jewish Lower East Side. A developer of lux­ury real es­tate, he wants to build two con­dos on ei­ther side of the Bi­a­lystoker. To make them as tall as pos­si­ble, he of­fered $54 mil­lion to the Bi­a­lystoker’s neigh­bors, the res­i­dents of the Seward Park Co­op­er­a­tive, for their un­used air rights.

The laws of cap­i­tal­ism, real es­tate, com­mon sense and grav­ity it­self sug­gest that when a per­son of­fers you $54 mil­lion for air you don’t hap­pen to be us­ing, you take it. No one turns down good money to save a neigh­bor­hood, es­pe­cially one that’s mostly gone al­ready. But in the el­e­va­tors and hall­ways of the Seward Park Co-op, sub­ver­sive ideas be­gan to cir­cu­late.

“The glass-tower change we’re con­sid­er­ing is not in­evitable,” one let­ter slipped un­der apart­ment doors read. “We are not pas­sive by­standers.”

The Seward Park Co-op is a com­plex of four big red­brick tow­ers built for work­ers in the 1950s. It is now home to a frothy mix of young pro­fes­sion­als and old-school Lower East Side Jews. Among the res­i­dents, Ka­liner’s money al­most started a civil war. In mid-June, when the air rights deal went up for a ref­er­en­dum, only 57% of the co-op voted in fa­vor. The rules of the build­ing re­quired a two-thirds ma­jor­ity, so the $54 mil­lion stayed in Ka­liner’s pocket.

“Who in their right minds would have ever thought that this thing wouldn’t pass?” Ka­liner said the other day, stand­ing out­side his empty nurs­ing home shortly af­ter the vote, avi­a­tors hang­ing from the un­but­toned neck of his un­tucked white but­ton-down.

The con­sen­sus up and down Grand Street had been that Ka­liner would ob­vi­ously win his air rights. The op­po­site out­come was unimag­in­able: A mid­dle-in­come apart­ment com­plex in a gen­tri­fy­ing neigh­bor­hood de­lib­er­ated long and hard be­fore ex­tend­ing a long mid­dle fin­ger to a developer of­fer­ing res­i­dents an un­godly amount of money.

In New York City, where de­vel­op­ment is an ir­re­sistible force that bar­rels through neigh­bor­hoods, leav­ing glass tow­ers and ren­o­vated lux­ury ren­tals with new stain­less steel kitchen ap­pli­ances in its wake, such a re­jec­tion stands as an in­sult to logic and rea­son. But on the Lower East Side, it might be some­thing else: ev­i­dence that amid all the shiny con­dos, some­thing of the old neigh­bor­hood is still hang­ing on.

The Flood

The north­ward vista from the cor­ner of Clin­ton Street and Grand Street looks like a wash af­ter a flash flood: ev­ery­thing rec­og­niz­able swept away, with strange new ob­jects dropped in out of nowhere. There are three new al­most-com­pleted build­ings on the blocks be­tween Grand Street and De­lancey, and at least three more

For a gen­er­a­tion, Jewish power bro­kers worked to hold off de­vel­op­ment.

are al­ready in process, all part of a megade­vel­op­ment known as Es­sex Cross­ing.

Es­sex Cross­ing isn’t so much chang­ing the neigh­bor­hood as re­plac­ing it. A cor­ner of the city with a sin­gle su­per­mar­ket and barely any restau­rants is about to get a Trader Joe’s and a Tar­get and a movie the­ater and a mu­seum. There will be 1,000 new apart­ments, a new 24-story build­ing on De­lancey Street, a brand­new sky­line and nearly a decade of con­struc­tion.

For a gen­er­a­tion, a tri­umvi­rate of Jewish power bro­kers worked to hold off de­vel­op­ment on the Es­sex Cross­ing site. The three men, State Assembly speaker Shel­don Sil­ver, a not-for-profit ex­ec­u­tive named Wil­liam Rap­fo­gel and a build­ing man­ager named Heshy Ja­cob, fought for years to op­pose the con­struc­tion of low-in­come hous­ing there. The men were old-school ward bosses with a power base among the Jewish stal­warts of the Seward Park Co-op and its three sib­ling de­vel­op­ments, known col­lec­tively as the Grand Street Co-ops.

“If you’re the per­son that some­body has a prob­lem and he goes to [you] day and night, you take the time and ef­fort to help them, then they think you’re in charge,” Ja­cob told the For­ward in 2013. “They go to Wil­lie, they go to Heshy, they go to Shelly.”

Built by trade unions in the 1950s, the co-ops were home to the gen­er­a­tion of mid­dle-class Jews who stayed on the Lower East Side af­ter its ghetto hey­day had passed and the Yid­dish-speak­ing masses moved away. The build­ings came to sym­bol­ize an in­su­lar, parochial Jewish­ness, rooted in a half-re­mem­bered his­tory of la­bor unions and so­cial­ist news­pa­pers and Or­tho­dox yeshivas.

As the co-ops pri­va­tized, al­low­ing res­i­dents to buy and sell their apart­ments on the open mar­ket, and as yup­pies slowly bought out old-timers, the tri­umvi­rate’s in­flu­ence be­gan to erode. By 2013, as the Es­sex Cross­ing deal slowly so­lid­i­fied, Rap­fo­gel and Sil­ver had come out in fa­vor of the new plan, which in­cluded a mix of low­in­come and mar­ket-rate hous­ing. Only Ja­cob held out.

When change came, how­ever, it spared no one. De­vel­op­ment on Es­sex Cross­ing plots came at the same time as an eerily co­in­ci­den­tal neigh­bor­hood purge, in which Sil­ver got in­dicted, con­victed and then con­victed again; Rap­fo­gel went to jail, and Ja­cob died.

To­day, the whole neigh­bor­hood is a con­struc­tion site. On the other side of the Seward Park Co-op, off to the south, a new 80-story condo blots the view of the Man­hat­tan Bridge. Smaller condo projects dot the neigh­bor­hood, in­clud­ing one at the site of the old matzo fac­tory and an­other in the old HIV/AIDS nurs­ing home. Each block has its own omi­nous “for sale” signs, or newly empty lots. (The For­ward sold its his­toric head­quar­ters, just across East Broad­way from the co-op, in an ear­lier wave of gen­tri­fi­ca­tion a few decades ago. To­day, build­ing staff

mem­bers of the lux­ury condo there wear the word “For­ward” on the chests of their shirts, writ­ten in the font this news or­ga­ni­za­tion used to use on its mast­head.)

Amid all the new tow­ers, Ka­liner’s project at the Bi­a­lystoker is, as Ka­liner tells it, just a blip. A pretty big blip, granted, but a blip all the same. To Ka­liner, a glance around the neigh­bor­hood proved his point: Might as well work with me, be­cause change is com­ing whether you like it or not.

“This is not the old Lower East Side any­more,” Ka­liner an­nounced, ges­tur­ing up and down Clin­ton Street, bor­dered on both sides by the Seward Park Co-op and end­ing at Es­sex Cross­ing. “Stand at the cor­ner, you look to your right. What do you see? Tar­get and Trader Joe’s. Do I need to say more?”

The Buzz

Dan Strum moved into the Seward Park Co-op in 2000. In 2004 he wrote an ar­ti­cle for a build­ing news­let­ter; the news­let­ter got can­celed be­fore the ar­ti­cle ran, so he started his own web­site and posted the ar­ti­cle there. A decade and a half later, his site, The Seward Park Buzz, is a busy ul­tra-lo­cal news web­site for the res­i­dents of the Seward Park Co-op’s four build­ings.

It’s dif­fi­cult to fathom an apart­ment com­plex that gen­er­ates enough news to jus­tify its own news web­site, but the co-op is some­thing more than just a large build­ing. Over the decades, it’s de­vel­oped a vi­cious po­lit­i­cal cul­ture, with de facto par­ties, al­le­ga­tions of elec­tion fraud, bar­rages of po­lit­i­cal ads each campaign sea­son and deep cur­rents of mis­trust.

To ex­plain it, Strum, who works in IT se­cu­rity, cites an Arthur C. Clarke line about com­bin­ing bits of ura­nium and get­ting not a big­ger bit of ura­nium, but rather “a hole half a mile across.” In the same way, Strum said, “when you get a com­mu­nity of 3,000 share­hold­ers, you get some­thing dif­fer­ent than just a big­ger co-op.”

Strum’s site tracks the long his­tory of the air rights ref­er­en­dum back to April 2016, when the co-op’s board first told the share­hold­ers that it had re­ceived an “ex­pres­sion of in­ter­est” from the own­ers of the Bi­a­lystoker. He has the first anony­mous fly­ers op­pos­ing the deal, dis­trib­uted in May 2017, up through the bar­rage of signed and un­signed let­ters posted in the build­ing in the weeks be­fore the vote.

It was a de­bate that drew in hun­dreds of the co-op’s res­i­dents. Ten­sions were high. Mo­ti­va­tions were ques­tioned. “There’s a lot of mis­trust in our com­mu­nity,” Strum said. “I don’t know if that could be over­come.”

It was that very mis­trust that led the share­hold­ers, a num­ber of years ago, to amend the build­ing’s by­laws to re­quire that any sale of air rights be ap­proved by a two-thirds vote in a ref­er­en­dum of all the co­op­er­a­tors. Still, when the Bi­a­lystoker of­fer came through, it seemed ob­vi­ous it would pass.

Bi­a­lystoker, built in 1929 by im­mi­grants from the Pol­ish town of Bi­a­lystok, had been the co-op’s neigh­bor since the co-op was built. Lo­cated at the in­ter­sec­tion of Clin­ton and East Broad­way, it looks more like a Ma­sonic tem­ple than it does a Jewish nurs­ing home, with an­gu­lar set­backs that as­cend to a tower, and stone sym­bols around the door, which rep­re­sent the Twelve Tribes and look some­how oc­cult. The nurs­ing home closed in 2011 amid al­le­ga­tions of mis­con­duct by its board, which had sold the ratty, squat of­fice build­ing next door to the board’s pres­i­dent. Fol­low­ing the in­ter­ven­tion of the state at­tor­ney gen­eral, the pres­i­dent re­turned the of­fice build­ing, and the board even­tu­ally sold it, along with Bi­a­lystoker it­self, to Ka­liner’s firm.

Last year, Ka­liner knocked down the of­fice build­ing. With­out it, the Bi­a­lystoker, its win­dows boarded, looks like the last dead tree in a clearcut for­est.

With the ex­ist­ing air rights, Ka­liner could build two tow­ers of 17 and 20 sto­ries, re­spec­tively, on ei­ther side of Bi­a­lystoker. With the pur­chase of the co-op’s air rights, he could build the tow­ers to 22 and 33 sto­ries. What­ever hap­pened, the tow­ers would, for the first time, block air and light to cer­tain apart­ments in the tower of the co-op’s Build­ing 2, which, like all the co-op build­ings, is 20 sto­ries tall. Af­ter

months of ne­go­ti­a­tions, Ka­liner of­fered the co-op $53 mil­lion. The board voted unan­i­mously to en­dorse the sale.

“Our board ap­plied a very strict busi­ness ra­tio­nale,” Strum said. “The board, to its credit, kept say­ing, ‘Give us more money.’ That was ba­si­cally the guid­ing prin­ci­ple.”

Later, amid a lob­by­ing campaign that in­cluded a free Shab­bat Kid­dush lunch at a syn­a­gogue across the street, Ka­liner goosed the of­fer. His com­pany raised it a mil­lion dol­lars, to $54 mil­lion, with the last mil­lion ear­marked to ren­o­vate the co-op’s lob­bies.

It was that $1 mil­lion that re­ally ticked off a res­i­dent named Elise Testa.

The Lob­bies

The Seward Park Co­op­er­a­tive is, in fact, fa­mous for its lob­bies. The main en­trances to each of the build­ings are rel­a­tively Spar­tan, aside from the mas­sive so­cial­ist re­al­ist mu­rals painted on the walls of each one by a Hun­gar­ian-Amer­i­can Jewish Marx­ist named Hugo Gellert. One of the Gellert mu­rals de­picts Abraham Lin­coln; an­other, Al­bert Ein­stein; an­other, Franklin Roo­sevelt, and the last, Thomas Jef­fer­son. Images of work­ers, moth­ers, bro­ken swords and slaves in chains flank the great men.

The lob­bies have, in the years since pri­va­ti­za­tion, re­peat­edly been a source of con­flict among the co­op­er­a­tors. They are a sym­bol of the good and bad of the co-op’s early his­tory; the ide­al­is­tic co­op­er­a­tive spirit, and the abid­ing re­sis­tance to change. The New York Times re­ported in 2003 that the board had con­sid­ered cov­er­ing up the mu­rals on three sep­a­rate oc­ca­sions, the last time end­ing in a ra­zor-thin preser­va­tion­ist vic­tory that has kept them on dis­play ever since, faded but visible.

So when Ka­liner’s firm of­fered, on June 10, two days be­fore the sched­uled ref­er­en­dum, to throw in an ex­tra $1 mil­lion specif­i­cally dedicated to the lobby, it re­ally both­ered Testa.

“That, for me, was a par­tic­u­larly of­fen­sive strat­egy,” said Testa, who has lived in the build­ing since 2008. “How dare he tell us how to spend our money?”

Testa’s apart­ment is in the tower di­rectly af­fected by Ka­liner’s project, and Testa had been part of the core group of or­ga­niz­ers op­pos­ing the air rights sale from the start. But it was the $1 mil­lion for the lobby that she was still steamed about when we spoke on the phone a week af­ter her side’s vic­tory. “It was of­fen­sive be­cause, in ad­di­tion to eras­ing the his­tory of that part of the Lower East Side by build­ing these build­ings that have noth­ing to do with it, he was giv­ing us money to also erase the his­tory of our own

co-ops,” she said. “I think the de­sire for ren­o­vat­ing the lobby is an as­pi­ra­tion to be­come more like any other build­ing that has some cheesy, fancy fur­ni­ture and some chan­de­liers.”

Not ev­ery­one is hor­ri­fied by the idea of a mod­ern lobby. Brett Leit­ner, a lo­cal ac­tivist who lives in the co-op and sup­ported the sale, doesn’t have much time for hand-wring­ing about yup­pi­fy­ing the place. “Hav­ing a lobby that lit­er­ally hasn’t been touched since the year 1960?” he said. “I mean, please.”

Still, even the par­ti­sans of lobby renovation un­der­stand the conservative in­stinct. It’s hard to live in the Seward Park Co-op and not be sick of all the con­dos. “For many, the ‘no’ vote was kind of a bul­wark to stop and say, ‘We’re not go­ing to suc­cumb to ev­ery op­por­tu­nity to re­de­velop each and ev­ery par­cel of land,’” Leit­ner said. “I get that sen­ti­ment. I largely agree with that sen­ti­ment.”

No Win­ners

The most in­flu­en­tial ad­vo­cate in the com­plex of protest­ing the tide of lux­ury con­dos was Jolly, a for­mer pres­i­dent of the co-op’s board who has lived in the build­ing since 2003, and whose apart­ment is in the same tower as Testa’s. Jolly wasn’t one of the anti-sale or­ga­niz­ers, but in early June she drafted a let­ter that was cir­cu­lated among res­i­dents and posted, along with scores of oth­ers, on Strum’s site. In it, she ar­gued that the res­i­dents of the Seward Park Co-op had a re­spon­si­bil­ity to make a state­ment.

“This mo­ment is also a sig­nal to our neigh­bor­hood and to our City,” Jolly wrote. “Our co-op is huge. We who call this our home have a con­sid­er­able voice. What we choose to say re­sponds not only to the pro­posed de­vel­op­ment project, but also what we say to those re­mote real es­tate in­ter­ests that value our neigh­bor­hood sim­ply in terms of profit.”

Over the phone a week af­ter the vote, Jolly said that she wasn’t an­tide­vel­op­ment, per se, and that she sup­ported the Es­sex Cross­ing project. But she said that she had watched Chelsea turn into “a non-place,” and didn’t want the same to hap­pen to

the Lower East Side. “It’s not an­tide­vel­op­ment no mat­ter what, no mat­ter where,” Jolly said. “It’s [against] this par­tic­u­lar type of bring­ing ex­tremely wealthy peo­ple into a neigh­bor­hood that has a rich his­tory and is try­ing to hold on to its roots as much as pos­si­ble.”

Of course, while Ka­liner will likely sell apart­ments in his co-op for mil­lions of dol­lars, the Seward Park Co-op isn’t so cheap any­more, ei­ther. Plenty of old res­i­dents re­main who paid a few thou­sand dol­lars for their apart­ments be­fore pri­va­ti­za­tion, but to­day, onebed­rooms list for as much as $1 mil­lion.

While bat­tles on the Seward Park Co-op’s board of­ten come down to dis­agree­ments be­tween the old-timers and the post-pri­va­ti­za­tion new ar­rivals, the frac­tures over the air rights is­sues were not nearly as neat. The res­i­dents haven’t for­mu­lated any uni­fied the­ory about how the vote split.

The reg­u­lar blocs were di­vided, Jolly said. Some of the old-timers wanted the fi­nan­cial relief that the $54 mil­lion would bring. Oth­ers, driven by long­stand­ing dis­trust of the board, voted no. The new ar­rivals were split, too,

Jolly said, be­tween those who wanted to preserve the char­ac­ter of the neigh­bor­hood where they’d moved and those who saw what the cash in­fu­sion could do for the build­ing’s ag­ing in­fra­struc­ture.

Jolly rec­og­nized that Ka­liner was go­ing to build some­thing, no mat­ter how the vote turned out. But she said that she saw value in say­ing no, even if it would only limit, and not pre­vent, con­struc­tion at the Bi­a­lystoker site.

“On one side the ar­gu­ment is, it’s just nat­u­ral change and it’s in­evitable,” Jolly said. “I think it’s a very sort of pas­sive, vic­tim-y stance that fright­ens me.”

Her let­ter was in­flu­en­tial. It’s im­pos­si­ble to say what swayed the 9% of vot­ers who made the dif­fer­ence be­tween the sale go­ing through and the sale fail­ing, but her quixotic war cry against lux­ury con­dos and seems to have caught the imag­i­na­tion of the co­op­er­a­tors. On June 12, a firm called Elec­tion-Amer­ica brought iPad vot­ing ma­chines into the co-op lob­bies, and res­i­dents of 1,127 of the de­vel­op­ment’s 1,608 apart­ments cast bal­lots. As Strum re­ported in a de­tailed break­down at the Seward Park Buzz, the air rights ref­er­en­dum fell 128 votes short of the two-thirds ma­jor­ity re­quired for pas­sage.

That’s when Rob Ka­liner went for his long walk.

The Af­ter­math

Ka­liner’s still go­ing to build: Or he said so June 19, just a week af­ter the vote. He’s gone back to his ar­chi­tects and is re-eval­u­at­ing his op­tions. “I’m brush­ing off the old plans and we’re go­ing to start again,” he said. He may build the two shorter tow­ers, or he may build one large tower on one of the two plots. He hasn’t de­cided yet. He says he’s not go­ing to sell off the lot to an­other developer. “No,” he said. “We’re build­ing.” For the res­i­dents of the Seward Park Co-op that means that they will still have a lux­ury condo or two pop­ping up next door; that some of the co­op­er­a­tors will be los­ing their views, and that there will be no in­flux of $54 mil­lion in the de­vel­op­ment’s cof­fers.

“They will re­de­velop that land,” Leit­ner said. “I don’t see how that’s a vic­tory. And in re­turn, we get ab­so­lutely noth­ing.”

Some sup­port­ers of the sale aren’t giv­ing up yet. A pe­ti­tion, cir­cu­lated anony­mously, calls for a revote. “WE DO NOT AC­CEPT THAT THE MI­NOR­ITY CAN CAUSE SUCH A HARD­SHIP FOR THE MA­JOR­ITY,” its all-caps de­mand reads.

Even if the air rights deal is de­feated per­ma­nently, it seems un­likely that the skir­mishes over de­vel­op­ment within the co-op are over. A walk around the prop­erty’s perime­ter re­veals that the co-op owns a wealth of real es­tate assets, in­clud­ing an un­sightly old of­fice build­ing and a strip of com­mer­cial store­fronts that look pos­i­tively dowdy across Grand Street from the gleam­ing new fa­cades of Es­sex Cross­ing. Consumed with in­ter­nal tur­moil, the co-op has sat on these prop­er­ties for decades, keep­ing them out of play amid the de­vel­op­ment gold rush. Maybe now, with the air right sales off the ta­ble, their time has come.

In the mean­time, Ka­liner is still bullish on his in­vest­ment. “I’m a developer, so I look for emerg­ing mar­kets,” he said. “We were look­ing for sort of, like, the next fron­tier. So what do you look for? Do you see cool cof­fee shops open­ing? Are you near a train? Do you see cool ice cream places? Sushi bars? So here, Ice & Vice opens,” he said, ges­tur­ing to the “ex­per­i­men­tal ice cream” chain across from the Bi­a­lystoker. “One of the hottest places.”

The Bi­a­lystoker site, in the lee of the Seward Park Co-op, checked all the boxes. Per­haps it’s just that 43% of the co-op’s share­hold­ers don’t want to be some­one else’s emerg­ing mar­ket.

‘They’re very sen­si­tive be­cause they get beat up so much.’

BEN FRACTENBERG

HEAR­ING THE BUZZ: Dan Strum ed­its the ul­tra-lo­cal news site the Seward Park Buzz, which cov­ers the Seward Park Co-ops.

BEN FRACTENBERG

THERE GOES THE NEIGH­BOR­HOOD: The Seward Park Co-op is a com­plex of four big red­brick tow­ers built for work­ers in the 1950s, and now home to a frothy mix of young p ro­fes­sion­als and old-school Lower East Side Jews.

BEN FRACTENBERG

DE­TAILS: The Bi­a­lystoker Cen­ter for Nurs­ing and Re­ha­bil­i­ta­tion’s fa­cade.

BEN FRACTENBERG

LOBBY HEROES: On the his­tor­i­cally Jewish Lower East Side, the Seward Park Co-ops are fa­mous for their lob­bies. A WPA-era mu­ral (above) in the lobby of one of the build­ings was painted by Hugo Gellert.

BEN FRACTENBERG

ON THE PLAT­FORM: An Or­tho­dox man takes a mo­ment to read at the De­lancey Street sub­way sta­tion on New York’s Lower East Side.

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