CB8 back to square one as new HQ deal falls through

It’s back to the drawing board for the executive committee and staff of Community Board 8 in its search for a new home.

The team has been searching for a new office for nearly four years and has spent “thousands of hours” negotiating with a prospective landlord at 185 W. 231st St., CB8 chair Laura Spalter said in a virtual June 23 executive committee meeting.

That landlord, whose identity is hidden behind a limited liability company, just pulled out of the deal, citing a section of fire code that would require a sprinkler system if the property were divided into three units as planned.

More likely, the nearly 5,000-square-foot former bank has enticed another tenant during its three years on the market. Raymond Mordekhai of Forest Park Properties currently lists it for lease at an asking rent of $16,553. It boasts 10-foot ceilings, full-size windows, and wheelchair-accessible bathrooms, elevator, and a lobby.

A city architect contested the owner’s interpretation of the fire code, but to no avail. A sprinkler system would indeed be costly to install.

The community board has been in its current space on the ground floor of 5676 Riverdale Ave., since 1984. The lobby is bright and airy, and the walls are adorned with prints of country scenes by Edouard Manet and Fred MacNeil. But just past the elevator, a pair of double glass doors leads down a narrow wheelchair ramp into CB8’s windowless quarters. The dollhouse-sized conference room is poorly suited to CB8’s needs, and it tends to get flooded during heavy rain.

“We’re interested in Kingsbridge,” Spalter said last week. “Our goal is to be centrally located.”

As if moving in New York City weren’t arduous enough, community boards must gain the approval of multiple city agencies before anyone can sign a lease. The city administrative services department, which assists community boards and other city agencies in negotiating office rentals, appointed CBRE’s Sean Wilson as CB8’s consultant. Architects weigh in on both sides. They draft up building plans and redraft them until the blueprint passes muster with the city’s management and budget office.

Spalter said the process has been “like a mini-ULURP (uniform land use review procedure).”

“Even with our (architect’s) letter, the owner is risk-averse and was not willing to continue negotiations,” Wilson wrote to Spalter after the deal with the owner of 185 W. 231st fell apart. Upon receiving the news, she called for an executive committee meeting and read Wilson’s letter aloud, continuing, “They are targeting a tenant that can take the entire 4,500 square feet of space available on that floor and their architect has confirmed that this layout will not require a sprinkler system.”

“I’m sure you have lots of questions,” Spalter concluded. “It’s very upsetting.”

Wilson had been working with CB8 and various city agencies to bring the deal across the finish line, clearing numerous hurdles over the past three years only to arrive at a final impasse last month over the question of sprinklers.

They began negotiating with the owner of 185 W. 231st in September 2018 after Capital One Bank vacated it. The building is ideally suited to the community board’s needs. It is accessible and located less than a block from the West 231st stop on the 1 train.

The site came with a huge vault, which administrative services’s architects incorporated into their design for CB8’s future office. But the city’s managemenet and budget office rejected those plans and compelled the landlord to remove the vault, which they did, completing the renovations over the course of several months in 2021.

By December, the building was nearly ready for its new tenants. The owner planned to divide the space into three units, one of which would be occupied by CB8 on a long-term lease. (Community board offices are not allowed to exceed 1,600 square feet.)

In the interim, the market plunged. Americans fled their offices and went in and out of lockdown during the first two years of the COVID-19 pandemic.

A tepid recovery began around the middle of last year, but gains in office rentals have been uneven, with average asking rents in the most prestigious Class A buildings growing 3.1 percent in the New York metro area year-over-year at the end of the first quarter of 2022, while the asking rent in middle and low-tier properties continued to decline, losing 1.8 percent over the same period.

In May, Marcus & Millichap reported the office usage rate in the New York metro area was a mere 38 percent of pre-pandemic levels. The firm projects the office vacancy rate will continue its upward march, reaching 17 percent citywide in 2022.

Overall, average asking rent is up 1.2 percent for offices year-over-year in the New York metro area to end the first quarter of 2022 at $56.54 per square foot.

“We have to factor in that we’re in a different economy now than we were back when all of this began,” said CB8 vice chair Bob Bender in last week’s meeting. “I certainly have no idea what the landlord is thinking, but he may have some options now that he didn’t have when we started down this road.”

Other members speculated that a 20-year lease might no longer hold the same appeal for landlords as it once did.

“The real estate market today is very different,” Spalter said. “Years ago, landlords welcomed 20-year leases and the stability of renting to the city. They welcomed it. They loved it. Now they don’t want 20-year leases, 30-year leases. They want a short lease. They want to raise the rent. DCAS was explaining it’s a very different mindset today. So, this is a difficult situation we’re in.”

“It’s pretty clear,” added budget committee chair David Gellman. “They took out the safe, and they got a big space. They decided they could find a better deal. It’s that simple. I think we should talk a little more with DCAS, and moreover with our electeds to put some pressure on them, because I don’t know who the landlord is. I don’t care who the landlord is, but they walked away from what was months of work and clear intentions and signed documents and they’re trying to take advantage of some technicality that our own architect said is rubbish. I think pressure should be brought to bear on them.”

Spalter said she and district manager Ciara Gannon have already begun visiting other available lease spaces.

in the district.