The Sheldrake Corporation will take over management of Westview and Island House July 1, if the State Division of Housing and Community Renewal (DHCR) grants a waiver requested by Charles Lucido, the current owner.  Grant of the waiver, which would bypass competitive bidding for the management contract, appears routine.

Sheldrake is negotiating purchase of the buildings, and expects to have a ground-lease extension from the Roosevelt Island Operating Corporation (RIOC) by July or August, according to Otis Jones, a retired DHCR executive who is working with Sheldrake on the deal.

But the Westview Task Force, representing tenants, has created a nonprofit corporation with the goal of buying the building.  It has received “authorization” from the State Attorney General allowing it to conduct discussions with the owner, and last Wednesday asked RIOC for a meeting to discuss a ground-lease extension related to a tenant-sponsored co-oping plan.

Roosevelt Island Housing Management (RIHMC), a unit of Jerome Belson Associates, which for years has managed both buildings, is to be terminated June 30, at the end of its current management contract with owner Charles Lucido.  RIHMC will continue to manage Eastwood, which is owned by Belson.

Rich McCurnin, an Assistant Commissioner of DHCR who will rule on the waiver request, said he expects to make a decision by mid-June.  Asked about DHCR rules that require a competitive bidding process to select managers of Mitchell-Lama buildings, McCurnin said, “We issued a policy years ago that when there is new ownership coming in and there is going to be substantial investment, in such circumstances we can allow an entity to manage the property without competitive bidding.”  He said the policy recognizes that an incoming owner has a special interest in a building, in protecting the value of a pending investment.

Lucido told The WIRE on Thursday afternoon that he has been pleased with RIHMC management of his buildings.  “But the idea is that Sheldrake get in as soon as possible as the management company, to build a relationship with the tenants.  This will provide firsthand experience for the new owner.”  Lucido said that as a general partner he will have a continued involvement in the partnership that owns the buildings, but Sheldrake is buying out all the limited partners entirely and will have majority ownership.

“I’m 70 years old and, because of my health, there is a need to cut both work and stress,” Lucido said.  “I was looking for a younger partner with experience in management of this particular kind of building.”

When asked when he thinks the new deal with Sheldrake will be complete, Lucido said, “Realistically, it will be 2005, depending on what obstacles present themselves.  Of course, I wish and hope for no objection from tenants and [government] agencies.”  He said the Sheldrake organization was selected among possible buyers because of its track record in privatizing Mitchell-Lama housing.  “My concern was to have somebody who would gain the respect and trust of the tenants, so they would be amenable.”

Opher Pail, who heads the Westview Task Force, commented on the situation by e-mail from Hong Kong, where he is on a business trip: “The Attorney General’s letter of authorization [to conduct purchase talks with Lucido] is a significant accomplishment for the Westview Task Force and a monumental milestone in Roosevelt Island history, as it puts our tenants association in a position to own the building and control our own destiny.

“Any other resolution that involves extension of the ground lease to a private investor will directly and quickly result in Mitchell-Lama buyout and unregulated market rents.”

Late Thursday, he added, “Westview tenants are shocked that RIOC would proceed with this transaction without considering what is best for the residents of Roosevelt Island – which is not the present proposal.  The residents of Westview have spent more than two decades building this community and should have some input into its future.”

Lucido said he had not yet heard about the letter to Westview tenants from the Attorney General.  He was negative about the possibility of some acquisition arrangement involving tenants: “A contract [with Sheldrake] is in place, and money has changed hands.”

Pail said that some 40 percent of Westview residents currently pay over half their net income for rent.  “They will become the first victims [of a private buy-out].  Ultimately, most Westview residents will lose their homes.  The Westview Task Force is determined to make every effort to avoid this catastrophe.”

Asked Thursday morning why RIOC would be willing to negotiate a ground-lease extension with Westview tenants who don’t actually own the building, Pail said, “We have [the Attorney-General’s] permission for a tenant-sponsored co-op.  We have legal standing now and intend to meet with them and discuss a deal directly with them.  We have engaged in fundraising over the past year and a half.  We have all the resources available to us, including legal, accounting, and engineering.  We expect RIOC to cooperate fully with us because it is in the State’s interest to work with us.”

Pail added, “Permission from the landlord doesn’t have to be in place before we meet [with RIOC] to discuss a ground-lease extension.  Our position is that if they extend the ground lease to anyone else it’s going to be the end for affordable housing at Westview and the entire Island.  That’s a fact.  They have an obligation to meet with us, to discuss the ground-lease extension.”

Tim Johns of the Island House Ownership Committee (IHOC), speaking of the management switch in the two buildings, told The WIRE, “This seems very hasty.  We have to look at why there is to be no bidding process.  It seems premature given the fact that Sheldrake is, so far as we know, still not an owner of record, and is involved in negotiations with RIOC at this very moment regarding extension of the ground lease.”

Johns added, “My concern is that this is like a de facto approval [of a Sheldrake purchase] by DHCR.  It strengthens Sheldrake’s hand vis-a-vis RIOC [in ground-lease negotiations].”

RIOC has the power to set the terms of a ground-lease extension and could lay down some guidelines regarding rent increases, future tenant ownership, and other matters, but it is believed that RIOC plans to take a laissez-faire attitude toward sale of the building and the future relationship between the owner and tenants.  The RIOC Board has not yet considered the issue in a public meeting, and neither press nor public is privy to the closed executive sessions it holds once a month.

On Thursday, a public relations representative speaking for Sheldrake said the company has selected a Certified Property Manager (CPM) to handle the properties, and plans to locate an office in the old Day Nursery space fronting the west promenade.  The CPM is Jennifer Jones, who most recently managed Concourse Village in the Bronx and has experience with DHCR-supervised buildings.  Robert Klehammer, Executive Vice President of Sheldrake, provided a brief statement through the public relations representative, including the comment, “The Sheldrake Organization looks forward to working closely with tenants to insure a smooth transition.”

Lucido, in talking with The WIRE, expressed a confident hope that there will eventually be some form of tenant ownership, in line with goals he embraced early in his involvement on the Island.

Audrey Berman Tannen of the Island House Task Force told The WIRE, “We were about to schedule our regular meeting with Doryne Isley [General Manager of RIHMC] when we were told, ‘We won’t be your management company in thirty days.’”  She continued, “We understand that, as tenants, we don’t have a say in this.  It’s an owner’s decision, along with DHCR.”  Tannen said that the Task Force posted a copy of the Lucido letter to Belson, giving 30 days notice of contract termination, at Island House elevators on Wednesday morning.

McCurnin of DHCR, in saying he expects to have a decision ready by mid-June, told The WIRE, “There are obviously a number of things I need to confirm in the letter” from Lucido to DHCR requesting a waiver of competitive bidding for building management.  “There is a transaction pending, and I need to look into that.  I’m not yet versed in it.”

The change in management would presumably end the relationship the buildings have with Isley, a change Johns saw as a downside of the Sheldrake involvement in his building.  “She’s the best thing that’s happened to the Island since I’ve been here,” he said on Wednesday.  “I would go so far as to say she would be a good president of RIOC – better than anything we’ve ever had.  She knows the Island, does her homework, and is conscientious.”

Aaron Silberman, President of Jerome Belson Associates, told The WIRE on Wednesday, “Roosevelt Island is the home of RIHMC, and we’ll always be there assisting and contributing to ensure that the Island continues to be the best place to live in the City of New York.”  He had no comment on the impending termination of RIHMC’s contract to manage Island House and Westview.  Asked about Doryne Isley’s possible future on or off the Island, he commented, “She’s a special person.  She is involved in other matters within the corporation and will continue to be the leader on the Island itself on behalf of the company. We think highly of her capabilities, which obviously the residents of Roosevelt Island have also recognized.”