Selling 427 Warren Street

Yesterday, the members of the Board of Estimate and Apportionment--Rick Rector, mayor; Heather Campbell, treasurer; Tom DePietro, Council president--together with city attorney Andy Howard met to discuss the sale of 427 Warren Street, the former police headquarters.

The amended resolution to sell the building, passed by the Common Council in November, contained the stipulation that the highest bidder would be subject to a penalty of $100,000 if the property was not developed within one year. At the informal Common Council meeting on Monday, DePietro seemed to suggest that more stipulations could and should be added, but the discussion on Tuesday seemed to be guided by Howard, who observed that "one year is pretty aggressive" and reminded the BEA that "the idea is [for someone] to take the building and develop it for commercial purposes." He cautioned, "The more strings and conditions, the less desirable" the building will be.

In the end it was decided that a revised resolution would be presented to the Council on Tuesday, January 15, that would stipulate a $100,000 penalty if the building was not developed or if it was sold within two years. Another requirement would be that 1,500 to 2,000 square feet of the street-facing ground floor be devoted to a commercial use.

Fifth Ward supervisor Rick Scalera, who was in the audience, possibly in his role as special adviser to the Galvan Foundation, asked if the building "is engineered to carry a second and third floor," asserting, "The bidders need to know this." He also asked about asbestos abatement and opined, "You could easily be into two years before you can get a building permit." He went on to say he didn't think anyone would be interested in the building if they couldn't add a second or third story. 

Howard commented, "There are thoughts that someone would come in and do a whole new building."   

Fourth Ward supervisor Linda Mussmann repeated her concerns about soliciting sealed bids instead of holding an open auction, which she maintained could bring a higher price if there were a bidding war. Scalera agreed with her. Howard noted that sealed bids gave the City the right to reject bids, which was not a possibility with an open auction. He disagreed that the City might get a higher price if there were competitive bidding, saying that bidding wars were very rare. 

Gossips can attest that there have been bidding wars in City auctions of foreclosed properties: 405 Warren Street in 2013 and again in 2014; 618 State Street in 2017. In each of those instances, the winning bid was offered by someone bidding on behalf of the Galvan Foundation or one or another of Eric Galloway's LLCs.  
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