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Co-op City - Buyout Dead For Now

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Co-op City - Buyout Dead For Now

Postby consigliere » Tue Oct 21, 2003 2:59 am

The article below, by Seth Kugel, appeared in the October 19, 2003 online edition of The New York Times:

To Make the Sale, First Fix the Roof

The biggest issue in the rambunctious world of Co-op City politics the past few years has been privatization. Should Co-op City, which, with 50,000 residents, has more people than Scarsdale and Mamaroneck combined, remain within the state's Mitchell-Lama subsidized housing program? Or should residents be allowed to sell their shares at market rates? It has been a heated battle.

Now everyone can cool down: the issue of going private is off the table. The president of Co-op City's directors, Al Shapiro, says it will not be reconsidered for at least five years.

But the decision, made this month, is not a victory for those who opposed privatization. It merely recognizes that the infrastructure of the complex, built in the 1960's, is in such bad shape that Riverbay Corporation, which runs Co-op City, must focus on getting state financing to renovate it.

Co-op City members buy shares at well below market rates and pay carrying charges that are used to run the complex and pay off the mortgage. The state is currently negotiating with Co-op City to refinance the $200 million left in the mortgage and arrange for $250 million to $300 million in loans to rebuild crumbling garages and balconies, replace roofs, modernize elevators and much more.

Sally Crockett, a spokeswoman for the state's Housing Finance Agency, said an agreement was imminent. Mr. Shapiro is more skeptical. "We're analyzing to see if we can afford their magnanimous gesture," he said, an ironic suggestion that the state has not been generous enough. "If we can live with it, we can do it." The latest version would install a construction monitor for the renovation, in part because the original work was so shoddy.

Perhaps the last straw in the decision to abandon privatization was the emergency closing of five Co-op City garages last summer. It forced officials to order large grassy areas paved over so cars could park. "The idea of putting it off for five years is that within five years you will have done what you have to do," Mr. Shapiro said. "You'll have a more attractive and marketable place. It's difficult to try to sell to people when you have cars parked on your greenway."

Focus has now shifted to working with the state. If the two sides come to an agreement, it will probably mean a rise in the carrying charges that co-op members pay, something that will make few residents happy.

The issues and their complexity continue to anger, befuddle and escape Co-op City residents, at least the sampling interviewed Thursday morning during rush hour.

"It's just awful; it's been that way for so many years," said Barbara Brown, a retired nurse who has been a resident since 1969. "It upsets me to even talk about it."

Irwin Fisher, a 20-year resident who works at Barnes & Noble, added: "I know privatization has been tabled. But I had no idea whether it would be good or bad."

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