The six-block, 2,820-unit Penn South cooperative housing development in Chelsea that was erected in 1962 by the International Ladies' Garment Workers Union needs $80 million in repairs and the city is offering to help if the residents postpone by eight years the day they will be able to cash in and sell their apartments at market rate, according to an article by Cara Buckley this week in The New York Times.
The article described the red-brick development as "a stretch of brick apartment buildings vaguely evocative of the Soviet bloc," adding that it "once was so left-leaning that residents Communists pilloried resident Socialists."
"The quarreling over whether to take the deal has stirred up some of the co-op's most enduring and singular quirks. Supporters are being described by opponents as cobwebbed zealots, blindly determined to keep the place low-cost. Opponents are being branded as capitalist sell-outs, and say that the co-op board has unleashed whisper campaigns to bring them down," the article said.
"'These are people who are greedy and who want to go private,' said Karen Smith, a retired acting Supreme Court judge and the leader of one of Penn South's two internal political parties. The prospect of the repairs has already upended some lives: because repair crews would have to break through many walls, the co-op is holding anti-hoarding workshops to persuade residents to start parting with decades of accumulated stuff. The results have been mixed; some elderly tenants have been spotted in their pajamas reclaiming items from dumpsters at 2 A.M.," the article said.
The handsome complex "is formally known as the Mutual Redevelopment Houses, is one of the last of a breed of New York co-ops built for the working class," the article said, adding that "similar complexes on the Lower East Side have since voted to go market rate, including the co-ops along Grand Street."
"The Penn South apartments," the article continued, "are restricted to middle-income earners - the maximum family income for a three-bedroom, for example, is $136,000 - and in the unlikely event that they leave, owners have to sell their apartments back to the co-op for about the same price they paid. Seventy percent of the residents are 70 or older, many of them original owners. Some 6,000 people are on the now-closed waiting list....Twice, in 1987 and 2001, more than two-thirds of the residents voted to keep prices restricted in exchange for continued property tax breaks. The vote on the city's offer...is expected to pass, because the two political parties - the Assembly of Concerned Cooperators and 2022, named for the year that tenants currently can sell on the free market - support the deal. If it passes, Ms. Smith said, the group may change its name to the new year: 2030."
"The article said that the city is offering a $5 million grant and a $17 million low-interest loan; the rest of the money would be borrowed from banks. The city would also extend Penn South's tax breaks. To repay the loans, monthly carrying charges, now $400 to $1,100 per unit, would go up $17 per room. 'We believe this is the only way to get enough additional income without unduly straining the budgets of the people who live here,' said Brendan Keany, the co-op's general manager,'" the article said.
"But," it continued, "Gena Feist, a lawyer and lifelong Penn South resident, said that the deal presented serious risks, and that it made more sense to get all the money from private lenders for just a few more dollars a month per apartment. She and other opponents say that the deal may violate a provision in the state's Constitution that limits the buildings' tax breaks to 60 years, raising the prospect that one day the co-op will have to pay the money back. (Housing officials say this will not happen.) Other dissenters say that counting on tax incentives is risky because if Albany becomes more conservative," the breaks could be revoked."
Residents of the Penn South co-op complex in Chelsea voted yesterday to accept a city financing deal to pay for repairs.
According to Brendan Keany, the site's general manager, 87 percent of people voted to accept the deal, while 13 percent voted no.
Votes from 1,650 units were cast.
The article described the red-brick development as "a stretch of brick apartment buildings vaguely evocative of the Soviet bloc," adding that it "once was so left-leaning that residents Communists pilloried resident Socialists."
"The quarreling over whether to take the deal has stirred up some of the co-op's most enduring and singular quirks. Supporters are being described by opponents as cobwebbed zealots, blindly determined to keep the place low-cost. Opponents are being branded as capitalist sell-outs, and say that the co-op board has unleashed whisper campaigns to bring them down," the article said.
"'These are people who are greedy and who want to go private,' said Karen Smith, a retired acting Supreme Court judge and the leader of one of Penn South's two internal political parties. The prospect of the repairs has already upended some lives: because repair crews would have to break through many walls, the co-op is holding anti-hoarding workshops to persuade residents to start parting with decades of accumulated stuff. The results have been mixed; some elderly tenants have been spotted in their pajamas reclaiming items from dumpsters at 2 A.M.," the article said.
The handsome complex "is formally known as the Mutual Redevelopment Houses, is one of the last of a breed of New York co-ops built for the working class," the article said, adding that "similar complexes on the Lower East Side have since voted to go market rate, including the co-ops along Grand Street."
"The Penn South apartments," the article continued, "are restricted to middle-income earners - the maximum family income for a three-bedroom, for example, is $136,000 - and in the unlikely event that they leave, owners have to sell their apartments back to the co-op for about the same price they paid. Seventy percent of the residents are 70 or older, many of them original owners. Some 6,000 people are on the now-closed waiting list....Twice, in 1987 and 2001, more than two-thirds of the residents voted to keep prices restricted in exchange for continued property tax breaks. The vote on the city's offer...is expected to pass, because the two political parties - the Assembly of Concerned Cooperators and 2022, named for the year that tenants currently can sell on the free market - support the deal. If it passes, Ms. Smith said, the group may change its name to the new year: 2030."
"The article said that the city is offering a $5 million grant and a $17 million low-interest loan; the rest of the money would be borrowed from banks. The city would also extend Penn South's tax breaks. To repay the loans, monthly carrying charges, now $400 to $1,100 per unit, would go up $17 per room. 'We believe this is the only way to get enough additional income without unduly straining the budgets of the people who live here,' said Brendan Keany, the co-op's general manager,'" the article said.
"But," it continued, "Gena Feist, a lawyer and lifelong Penn South resident, said that the deal presented serious risks, and that it made more sense to get all the money from private lenders for just a few more dollars a month per apartment. She and other opponents say that the deal may violate a provision in the state's Constitution that limits the buildings' tax breaks to 60 years, raising the prospect that one day the co-op will have to pay the money back. (Housing officials say this will not happen.) Other dissenters say that counting on tax incentives is risky because if Albany becomes more conservative," the breaks could be revoked."
Residents of the Penn South co-op complex in Chelsea voted yesterday to accept a city financing deal to pay for repairs.
According to Brendan Keany, the site's general manager, 87 percent of people voted to accept the deal, while 13 percent voted no.
Votes from 1,650 units were cast.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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