Rebounding and Renewing -Co-ops sell fast after Grand St. goes free market
By Albert Amateau
Published December 05, 2001
The Grand St. co-ops, four housing complexes with a total of 3,843 apartments developed by the labor movement over a period of 30 years from the late 1930's to the mid 1960's for middle-income residents, are changing with the times.
All of them - Seward Park, East River, Hillman and Amalgamated - were restructured after 1996 when a majority of their shareholders voted to "go private" and change from limited equity to being able to sell at market rate. And since then, the market has been brisk, according to brokers and co-op managers who say that Sept. 11 has slowed the market only a little.
"When the co-ops went private in 1997 there were caps on the prices that increased in yearly increments until they got to market rate in June 2000," explained Jacob Goldman, a principal of LoHo Realty, which concentrates on the Grand St. residences. The price caps were imposed by the co-ops in order not to flood the market and depress the value of the properties, Goldman noted.
However, the 236-unit Amalgamated co-op at 504 Grand St. was the exception; it went to market rate immediately.
"We've closed on about 100 deals, plus about 20 sublets in the past 18 months
in the co-ops," said Goldman, who is also an attorney and a member of Community
School Board 1. The total number of units in the co-ops is shrinking slightly, he observed, because some new residents are buying two adjacent apartments and combining them.
Other brokerages also handle Grand St. co-op business; among them are Halstead Realty and A Grand Village Realty.
Goldman believes the lively pace of the market indicates that the Grand St. units are still a great housing bargain despite having gone private. He notes that one-bedroom units range from $190,000 up, depending on amenities like a river view; two-bedrooms range from $275,000 to $425,000; and three-bedrooms sell for in excess of $400,000. Studio prices are from $140,000 to $180,000, he said. "Where else in Manhattan can you find an 800-sq.-ft. apartment for $1,800 a month, including mortgage and carrying charges?" Goldman asked.
Of course, for families who bought into the co-ops soon after they were built and paid from $3,000 to $12,000, "this is the big payoff," Goldman said.
Harold Jacobs, familiarly known throughout the Lower East Side as "Heshy," manager of the East River houses, with 1,672 units, and Hillman, with 807 units, agrees that Grand St. is the best housing buy in Manhattan despite the free-market status. Until recently, he also managed the Seward Park and Amalgamated co-ops, which are now run by independent units of Cooper Sq. Realty.
"I'm as native to the Lower East Side as native gets," remarked Jacobs, 58. "I was born on E. Fifth St., we moved to E. Sixth St. and then my parents moved to Ridge St." His three children and his grandchildren live in the co-ops, too. A longtime friend of Assembly Speaker Sheldon Silver, he attended a Yeshiva on E. Fourth St. and has a graduate degree from Yeshiva University. Jacobs worked for City Comptroller Harrison J. Goldin for 13 years during the administration of Mayor Ed Koch before becoming manager of the co-ops in 1988.
He estimates that 45 percent of the residents are original co-op members. "Some of them are 65, 70 years old or more. They can sell their apartments now for $200,000 or $300,000, buy a condo in Boca Raton [Florida] for $150,000 and still have $150,000 left. Naturally they want to live where the winters are mild," Jacobs said.
Neighborhoods change and the Lower East Side has been no exception, Jacobs observed. "From the 1880's to about 1950 it was all Jewish, from the 1950's to 1980 it became Hispanic and from 1980 to 1990 it gentrified and is becoming multi-ethnic," he said.
Jacobs prides himself on having operated the co-ops without increasing carrying charges for nine years. "It doesn't mean it will go on forever, but it does mean we watch every dollar. There's no job that I ask my men to do that I haven't done myself. If they have to jackhammer a surface, I've used a jackhammer myself and I know how it should be done and how long it should take. I watch the commodities market to time heating-oil purchases to get the best price."
Nevertheless, Seward Park residents in January voted for a board of directors that decided to change the management of that 1,728-unit, four-building co-op from Jacobs to Cooper Sq. Realty. Don West, a member of the Seward Park board said the new management is capable and more accessible and friendly. "It has an open-door policy," he said.
West also says that Seward Park is changing as young families and professional people become shareholders.
Still, the co-ops managed by Jacobs are thriving. Gene Golombek, executive director of South Manhattan Development Corp., a Lower East Side business advocacy and civic organization, is moving from the Village to the East River houses. He said he and his wife, Holly Kaye, like living in Greenwich Village, "but we have so much more space at East River - with a balcony and a wonderful view."
©The Villager 2001