Queens Co-ops Complete Historic “Land Lease” Purchases
Happy Indeed: Warren Schreiber (left) and Joseph Davi, presidents of Bay Terrace 1 and 2, respectively, after buying the land their buildings stand on. (photo courtesy Hankin Mazel)
July 27, 2017 — Bay Terrace co-ops buy the land they sit on, secure their futures.
Two of the nine co-ops in the massive Bay Terrace Cooperative in northeast Queens have completed the purchase of the land they sit on, with all but one of the others expected to follow suit in the coming months. Though the price paid to the land’s owner, Cord Meyer Development, was not disclosed, the eight parcels are expected to fetch between $20 million and $30 million total, sources tell the Commercial Observer. Ownership of the ninth parcel will be transferred to the co-op through a land swap.
“This is historic, it’s a great achievement, and I’m personally thrilled for the shareholders,” says attorney Geoffrey Mazel of Hankin Mazel, who represents Bay Terrace 1 and 2, as well as three more of the co-ops. He has been working on the sale for more than a decade.
Built beginning in the 1950s, the 1,800 units were under a 99-year “land lease,” an unusual arrangement that makes it difficult for co-ops to secure financing. It also depresses the value of apartments. When a land lease expires, the land’s owner can renegotiate the lease – or ownership of the land and everything on it reverts to the landowner. With land rents locked in at 1950s prices, and with about 40 years left before the land lease expires, Cord Meyer decided to sell now rather than wait.
“Just this past year, Cord Meyer developed offers for each co-op, which facilitated the sales,” says Mazel. “They’ve been a great partner.”
“This is something that I have probably worked on for 12 years,” Warren Schreiber, co-op board president at Bay Terrace Section 1, tells the Commercial Observer. “You ever work on one of those things and you don’t know if it would ever happen, and then one day it does! It was an exciting day for us.”
“This is a historic land purchase, not just in northeast Queens, but the whole city,” says city councilman Paul Vallone, who helped with negotiations. “Once all the other sections have finalized their land purchases, over 1,800 families of Bay Terrace will have complete control of their destiny and future for the first time.”