Since the City apparently uses the sponsor rents to help put a market value on coop's, would there be any possibility of a split taxation calculation passing the state legislature? The idea would be to tax the coop shares as one entity and the sponsors unsold shares as another.
This would attribute the coop entity a % of the annual coop expenses and income based on shares for taxation purposes as a residential property akin to a 1, 2 or 3 family home, and the sponsors unsold shares as a for-profit apartment entity with the remaining % of the annual expenses and income based on the unsold shares, but also including the rents and sponsor management costs as a separate entity.
A higher taxation rate might encourage the sponsors to 'complete the conversion', an issue which affects many coop's.