1520 Sedgwick Avenue, where hip-hop is said to have started. (Photo: Ozier Muhammad/The New York Times)
Why is a real estate mogul who once flipped San Francisco’s famous Bank of America Center to a group of investors that included Donald J. Trump interested in acquiring a working-class apartment building on the outskirts of the Bronx for less than $14 million?
“We think it’s odd that a guy of this stature is buying a 100-unit building on the access road of the Major Deegan that will be rent stabilized even if it comes out of Mitchell-Lama,” said Dina Levy, director of organizing and policy with the Urban Homesteading Assistance Board. “It’s literally like saying Donald Trump wants to buy a 100-unit rent-stabilized building that sits in the middle of nowhere. It’s crazy. It’s alarming. What does it mean exactly, we don’t know. But it can’t be good.”
Thus, the tenant groups, with support from United States Senator Charles E. Schumer, announced this morning that they were in talks to intervene in the proposed sale and buy the building themselves, with subsidies from the city.
The talks are continuing and the agreement might not materialize, but if successful, the negotiations would be a breakthrough in a long-running discussion over the apartment building, where experts say hip-hop was born in 1973. (A couple of readers in the comments dispute this claim, but we’re with Ricky D on this one.)
The building, at 1520 Sedgwick Avenue, would be just another one of the flurry of Mitchell-Lama buildings that have changed hands over the past few years, were it not for its community room. It was there, in 1973, that Clive Campbell, known as D.J. Kool Herc, started turning the tables at community parties, producing a sound, a rhythm and a style that spilled out into the nearby parks and streets and, later, to the world. Mr. Campbell was living in the building at the time with his sister, Cindy Campbell.
The building has 100 units rent for an average of $1,000 a month under the state’s Mitchell-Lama affordable housing program, in which private landlords receive tax breaks and subsidized mortgages and, in turn, agree to limit their return on equity and rent to people who meet modest income limits. The landlords are allowed to leave their contracts after 20 years, and the rate of those choosing to do so has accelerated since 2001. Last February, tenants were told that the owners planned to leave the program.
Often, the same buyers keep popping up for the Mitchell-Lama buildings. So Ms. Levy, whose nonprofit group supports tenant control of limited-equity housing cooperatives, was a bit surprised to see a new name, Mark Karasick, as a proposed buyer of 1520 Sedgwick.
“Clearly he is not going to make money from owning and operating this project,” Ms. Levy said.
She suspects that they may be picking up the building to resell it quickly. “Either to speculators that don’t know enough, but don’t know they don’t know enough or unscrupulous speculators,” she said. “Or there is a third possibility. The dollar is weak. We are thinking about foreign investors coming in.”
No matter what, she said, it is not good for the tenants — who have set up a Web site, Save1520.org, to publicize their situation.
In July, the tenants got a boost when state officials indicated that the building was eligible to be listed on the federal and state registers of historic places, even though it is not at least 50 years old — the normal threshold for such a designation.
In December, the owners of the building, who operate under a partnership called 1520 Sedgwick Associates, and Mr. Karasick offered to step out of the deal and let residents buy the project.
The last several days have featured negotiations involving the tenant group, the owners and even Mr. Karasick himself, according to Ms. Levy. But the asking price to unravel the deal is $14 million — which is the housing advocates say is way beyond the $5 million or $6 million they have calculated based on the future rent stream. And the tenants group says it is even prepared to pay above the market rate, since the group may be receiving subsidies from the city’s Department of Housing Preservation and Development and Housing Development Corporation.
Mr. Karasick’s lawyer, Steven Holm, did not respond to phone and e-mail messages requesting comment. For his part, Mr. Karasick has said his interest in the building has nothing to do with the building’s status as the birthplace of hip-hop, and tenant groups have been suspicious of his motives.
Mr. Schumer, a Democrat who was elected in 1998, is not particularly known as a fan of hip-hop, but the New York senator has taken on the project as a cause.
“In an increasingly turbulent housing market, 1520 Sedgwick is in danger of losing its affordable status, as its owner prepares to sell the building to wealthy speculators whose only hope of profiting on the building hinges on hiking the rent rolls,” Mr. Schumer said in a statement. “That is why it is essential that the owner negotiate a reasonable, affordable deal with the tenants and their representatives to preserve affordability in this special place for the long haul.”
Ms. Levy said she feared that Mitchell-Lama projects were increasingly seen for their investment potential and not for their original purpose — as affordable housing. “They are perceived as ‘undervalued assets,'” she said. “That is the term they are using in meetings with us. To us, it’s undervalued because it affordable. So your whole premise of buying it is to make it as unaffordable as possible.”
A flier promoting a performance by D.J. Kool Herc at 1520 Sedgwick Avenue on Aug. 11, 1973.
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