The Real Deal New York

Southbridge residents to vote on privatizing apartments

Proponents say residents who sell stand to make a hefty profit

April 29, 2014 04:25PM

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Southbridge Towers at 90 Beekman Place

Southbridge Towers at 90 Beekman Place

Residents of Southbridge Towers, a 1,651-unit complex of subsidized co-op units in the Financial District, are gearing up for a vote on whether to turn their homes into market-rate apartments.

Proponents of going private say the move will enable residents who snagged their apartments for $10,000 or less ten years ago to sell them for over $1 million. But others balk at the removal of affordable housing they say could serve future generations, and take issue with several points in a newly-released 900-page offering plan they say makes going market-rate appear risky.

“I would never have been able to afford living in Manhattan if it weren’t for Southbridge Towers,” John Fratta, a member of the complex’s board of directors, told DNAinfo. “To take 1,651 apartments of affordable housing away for the sake of greed is unconscionable to me.”

Other concerns include a potential increased cost of maintenance, and a 28 to 33 percent “flip tax” that must be paid back to the co-op when a unit sells for market rate. Advocates of privatization say the money from those taxes, based on projected revenues from the sale of 3 percent of the apartments per year, will hold down said maintenance fees.

“There are a lot of twists and turns in the 900-page offering plan,” Paul Hovitz, a longtime Southbridge resident, told the news site. “We’re having a lawyer sort through all of this because we’re not sure all of this adds up to actually benefiting everyone if we do go private.”

Wally Dimson, president of the board of directors at Southbridge, told DNAinfo that he encourages residents to thoroughly review the proposed privatization plan with the aid of lawyers and accountants if necessary. The board will also hold an informal question and answer session in June, though a date has not yet been set.

“We want residents to make the best decision for themselves,” Dimson told the news site. [DNAinfo]Julie Strickland

 

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