The New York City Department of Housing Preservation and Development has rejected developer Mark Karasick’s bid for the Mitchell Lama housing development in the western Bronx that many consider to be the birthplace of hip-hop, after an investigation determined that the sale price is not supportable under current rent restrictions.
The decision allows for the current owner to negotiate with tenants on a sale. The New York Times reported that the asking price was $14 million, more than the double its $5 to $6 million value estimated by housing advocates based on future rents.
In February, tenants of the 100-unit building at 1520 Sedgwick Avenue were notified that the building would be taken out of the Mitchell Lama subsidy program; that triggered a campaign to preserve the building as affordable housing. DJ Kool Herc, who helped spawn the hip hop genre spinning from the common room of 1520 Sedgwick in 1973, partnered with housing advocates to get the building deemed eligible for listing on the State and National Registers of Historic Places.
Meanwhile, New York Senator Chuck Schumer has gotten behind the preservation of the otherwise un-noteworthy “hip-hop landmark” to preserve the floundering Mitchell Lama program, which offers landlords tax breaks in exchange for providing affordable housing.
Today, HPD Commissioner Shawn Donovan announced that his agency has determined that Mr. Karasick’s plan is not financially viable, and for the first time in the history of the agency, has rejected the sale based on the purchase price.
Senator Schumer welcomed the HPD’s “milestone decision," which clears the path for tenants and their advocates to negotiate directly with the owner to buy the building.
“This very positive development is the first step toward preserving affordability not only for the families of 1520 Sedgwick, but all other endangered Mitchell-Lamas across the city,” Senator Schumer said in a statement released before a scheduled Monday afternoon press conference in the Bronx.
But he warned that the current owner still has the option of taking the building out of the Mitchell Lama program, at which point the sale would not trigger a government review.