When Rockrose Development sold its 324-unit Battery Park City rental building at 22 River Terrace to Centurion Real Estate Partners late last year, many speculated that the building would be converted to condosand much to the dismay of the current tenants, that's exactly what is happening. The Broadsheet has some details on the situation, and, apparently, "almost immediately" after Centurion bought the building the developer "began renewing leases for longtime tenants only if they agreed to a 90-day cancellation clause, which allowed the firm to order residents to leave for any reason." Then, early this year, they began refusing to renew leases. All of this happened before the tenants were told of a condo conversion; that news came in a notice last month (confirmed by commenters on our earlier post).
The notice, called a "red herring," is an initial draft of the offering plan, and by law, it must be sent to all tenants when a sponsor submits a plan for conversion. The notice revealed that Centurion plans to convert 22 River Terrace, which opened in 2001, under a "non-eviction plan," meaning that even if tenants (who had valid leases when the final plan was accepted by the Attorney General's office) decided not to purchase their homes, they would not be evicted. It also said that if the units were sold to "outsiders," the developer hoped to sell them for a total of $490 million. If they were sold to "insiders," i.e. current tenants, they would earn $416 million. (UPDATE: A rep clarifies the substantial difference between these two options: The former price was a voluntary offer to bona fide tenants at the time the final plan is accepted to purchase their units "as is"; while the latter units, renovated since they were built in 2001, would look different.) Now an informal tenants association says that Centurion is not renewing leases and plans to act on the 90-day cancellation clause.
The Attorney General's office is still reviewing the conversion plan for 22 River Terrace, so everything in the red herring is still speculativeand
subject to change, including pricing. Since all of the units are market rate, the developer is still legally allowed to decline lease renewals and exercise the 90-day cancellation policy early expiration clause. Additionally, leases expiring before the plan is approved will not be protected by the non-eviction plan. Before a plan is filed, regulations bar developers from stockpiling empty units. Still, the tenants' group is already bracing for a tough fight and promising to push for a "better deal" for those who want to purchase their units. UPDATE: A rep writes in to emphasize that there is no law requiring discount pricing for insiders, a move by the sponsor that was entirely voluntary.) Evidently, "prices are ridiculous."
· Rental Tenants Facing Eviction for Condo Conversion Alleged Bad Faith by Developer [Broadsheet]
· Is 22 River Terrace Headed For A Condo Conversion? [Curbed]
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