St. James Place Towers Vote “No” To Privatization

St. James Place Towers Vote “No” To  Privatization
St. James Place Towers Rally (Photo courtesy of the Office of Council Member Laurie A. Cumbo)

BKLYNER learned late Friday afternoon that the St. James Place Towers in Clinton Hill will not be privatized.

Following a vote on Thursday, the co-op’s board “did not reach the required two-thirds majority to proceed with privatization,” said Kristia Beaubrun, Communications Director for the Office of NYC Council Member Laurie Cumbo.

On Wednesday, Council Member Cumbo staged a rally against the privatization of the St. James Place Towers, the Mitchell-Lama development located in Clinton Hill that provides affordable rentals and co-op units for moderate- and middle-income families.

“After nearly fifty years of affordability, the shareholders of the St. James Place Towers must now make a tremendously difficult decision that will impact the outlook of Clinton Hill for future generations,” Cumbo stated.

“As gentrification continues to displace long-term area residents, the Mitchell-Lama program is among the few counteractive measures that currently exists to preserve affordable housing for middle-income families. Privatization undermines our city’s commitment to New Yorkers of all background – affordability for all,” she said.

Located at 21 St. James Place on the corner of Lafayette Avenue, the 326-unit property was developed under the Mitchell-Lama program in 1968.

According to NYC Department of Housing Preservation and Development (HUD) regulations, once a Mitchell-Lama co-op’s mortgage is paid in full, it is eligible to privatize — to voluntarily dissolve and reconstitute itself as a free-market cooperative or condominium property.

With the mortgage now paid off on 21 St. James Place, shareholders voted Thursday on whether to stay in the program or leave it and take advantage of market-rate prices on their units.

Elected officials, shareholders, and renters joined the rally on Wednesday, a day before the vote, to voice their opinions. Some shareholders argued that it is their legal right to opt out of the program and privatize, telling lawmakers to butt out.

Supporters wishing to stay in the program expressed concerns about displacement as well as the need to keep affordable housing options available for future generations.

Three shareholder votes must take place to approve the reconstitution of an eligible property. The first vote approving the preparation of a feasibility study for the St. James Place Towers took place in November 2016.

On Thursday, shareholders voted on whether to prepare a Plan of Reconstitution or Offering Plan to be filed with the New York State Attorney General. If accepted for filing, the plan must be distributed to all shareholders in the development. At least one meeting must be held before the final vote on whether to approve the privatization plan. Two-thirds of all shareholders must approve all votes—which did not happen Thursday, so the St. James Place Towers will not be privatized at this time.