By Maria Rocha-Buschel
Mitchell-Lama cooperative East Midtown Plaza is once again beginning the process to go private with a vote happening this Thursday evening.
The vote will be held at a special meeting that was called because the co-op’s board received a petition from more than 250 shareholders who support privatization. The property has been through this process in the past, with the last attempt at privatization resulting in a court case that sided with co-operators who were against the privatization, with a final decision made in November, 2012. Privatizing would allow residents to sell their homes at a profit. The special meeting this Thursday, which will be held at the NYU Dental School, is only open to shareholders.
The vote this Thursday is the first of three successive votes that shareholders will participate in to determine if the property will go private, and is for a feasibility study on whether or not the plan to go private is viable. The first vote only requires a simple majority of 51 percent of those who attend the meeting but the second and third votes require a two-thirds majority of all shareholders, rather than just those who show up at the meeting. The second vote is required to be held at least a year later where shareholders vote on a proposed offering plan on whether or not to continue to the next step. If the second vote passes, a “Black Book” offering plan is filed with the Attorney General, which proposes the form of a privatized co-op and the third vote, at least another year later, is taken on the completed, accepted and filed cooperative structure. If this vote passes, the property can privatize.
The controversy and subsequent court case that ensued after the last vote, which took place in 2009, was due to a difference in the interpretation of how votes were to be counted. The process in that round had begun in 2002 and reached the third and final stage, but each side claimed victory when the results showed a two-thirds majority when shares were counted, but also a two-thirds majority when individual votes were counted.
Jeanne Poindexter, who has lived in East Midtown Plaza for the last 42 years and who is opposed to privatization, said she was frustrated by this on-and-off struggle. A big reason, she explained, is the cost of the legal fees the last time the issue was raised.
“It will become unaffordable housing and we are sans affordable housing in the city,” she said.
Poindexter noted that one reason cited for privatization is to have money for major repairs that the property needs but she argued that there are other strategies that can be tried to make improvements.
“If your barn is on fire, you don’t have to destroy it in order to put out the fire,” she said. “You have to fix something or you can do these repairs but you don’t have to sell it. You can do it yourself. What does a private co-op do if it has do repairs? They borrow money, that’s the way living in buildings is managed.”
Town & Village was unable to get a comment from any pro-privatization shareholders by deadline.