The Real Deal New York

Trump Plaza co-op’s dilemma: big assessment or big rent hike?

Board decision could lead to $1M assessments per unit or sky-high rental reset

November 06, 2014 02:32PM

trump-plaza

From left: 167 East 61st Street, Adam Leitman Bailey and Douglas Harmon

Soon after the ground beneath Trump Plaza at 167 East 61st Street hit the market, members of the co-op board began weighing whether to pay a steep price for the land or keep paying rising bills to rent in the building.

If the shareholders fork out the $185 million that they have offered for the land, they would be hit with unit assessments that could go as high as $1 million apiece. An owner of a two-bedroom with 440 shares in the corporation, for example, would be charged $1.02 million.

The lease at the 39-story co-op building will reset in 2024, real estate lawyer Adam Leitman Bailey told Bloomberg News.

Several owners in the building contacted Bailey with concerns about the leasehold entering contract, particularly given the high land costs in the city. Douglas Harmon and Adam Spies of Eastdil Secured are representing the landlords, who are listed as Donald S. Ruth and members of the Ruth family, according to property records cited by the website

“Whatever opportunistic investor buys the land will probably be way more aggressive about the rent reset than either an estate or a group of heirs,” real estate attorney Joshua Stein told Bloomberg. “Someone who is buying it, is buying it specifically to squeeze out every last dollar of rent.” [Bloomberg News]Mark Maurer

  • Interested in a serious litigation scandal with a real estate developer tied to Trump through the Trump SoHo? This guy even sued him for a billion dollars: http://www.ripoffreport.com/r/Jody-Kriss/internet/Jody-Kriss-Mob-tied-principal-of-East-River-Partners-former-CFO-of-Bayrock-Group-Serial-1178613

  • DTNYC

    WHAT???!!!! ANOTHER TRUMP DEVELOPMENT SCREWS ITS PURCHASERS??? Seriously though…..Who is stupid enough to buy a land lease apartment with a non government land owner? I can’t have much sympathy for these people.

  • Tom

    Do not ever use Adam Leitman Bailey! I can’t wait to see this unethical jerk get debarred. This will end up being a bigger liability than their land lease expiration.

    • Bullied and Damaged by Rent Re

      He wrote the new Blumberg boilerplate lease. It’s really long – not sure how good a lease it is but we are in a hurry. He’s also helped Chinese tenants in the past possibly at a discount and may still do that kind of work. (Maybe we’ll see him as opposing counsel someday).

      We can’t afford him but he did give a word to the wise to us and when I mentioned it to another lawyer, he agreed that ALB had done us a kindness.

  • Tom Tompsons

    ALB will leave you high and dry.

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