Brooklyn co-op owners turn down $130 million payday. Would you do the same?

By Lucy Cohen Blatter | January 20, 2016 - 11:59AM

Whoever says everyone has their price may not be familiar with the shareholders at 75 Henry Street, a 32-story co-operative building that just turned down a $130 million offer from a developer. Anbau Enterprises wanted to build a high-rise condo and shopping complex on a property owned by the co-op on the adjacent Pineapple Walk, a car-free cobblestone street dotted with mom-and-pop stores.

The original offer was for $75 million—an apparent lowball—but was increased when the co-op refused it. Residents stood to make $150,000 to $400,000 depending on the size of their unit, according to the New York Post.

Steven Hafif, an attorney at Abrams Garfinkel Margolis Bergson, says offers like these aren't entirely uncommon, but turndowns are. "You usually hear about people accepting them," he says.

The shareholders voted 191-112 against the offer, citing issues like neighborhood and school overcrowding and the impending changes to the neighborhood's character. Construction noise and blocked sun and views (the building was planned to be 40 stories high) were other large issues, says Beverly Closs, who's lived in the building for eight years but the neighborhood for 35.

"I was against taking the buyout because it would change the neighborhood in a bad way," she says. "It would bring in more of the 1 percent," she tells BrickUnderground.

Closs, who owns a one-bedroom with a terrace, says it was tempting to take the money, but the concerns outweighed the pros. She says the board has gotten offers before, but this was the highest amount they'd received.

The fact that the mom-and-pop stores currently on Pineapple Walk would be demolished and likely replaced by chain stores that could afford the rent in the new condo building was another strike against it, says Closs. "We don't need anymore Gaps," she says. She pointed to the controversy surrounding a nearby Brooklyn Public Library that is being demolished and replaced with a 36-story condo tower. That deal cost the developer a mere $52 million.

Supporters of the 75 Henry Street buyout say the money could keep the co-op financially sound for the future, according to the Post. And attorney Jerry Feeney, who's worked on a lot of deals in that particular building, agrees. "I think they're being greedy," he says. "They could have paid off the building's underlying mortgage and built up their cash reserve," says Feeney. In July, he worked on an apartment that closed for $629,000. Given the share allotment, those buyers likely would have gotten $246,000. "I'd put up with a lot of dust and construction for that," he says.

But that opinion wasn't the most popular one. "I'd say our building is about 40 percent retired people. We're more set in our ways and we like our neighborhood as it is," says Closs.

But Hafif, who's worked with developers in these kinds of situations, says this lis likely not the end of the line for the developer, who can keep coming back "until they feel they've exhausted their offers."

The developer may offer $10 or $20 million more, says Hafif, but another $55 million jump isn't likely.

"I think they'll come back with higher offers," says Closs. "But I think our building will still say no."

(In case you're wondering there are currently two apartments for sale in the building—a $499,000 studio and a $1.725 million two-bedroom.)

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