Unit Owners In Lower Manhattan 40-Story Condominium/5-Star Hotel Combo Fear Loss Of Luxury Living, Value Of Their $3M+ Apartments If Ground Lease Change Is Made To Allow Developer To Convert Hotel Space Into Add'l Condos

In the Battery Park City section of New York City, Tribeca Trib Online reports:

• Taxis and black cars regularly roll up to Battery Park City's Ritz-Carlton Hotel, their doors opened by crisply uniformed, impeccably mannered doormen, their passengers among the most pampered of guests to Lower Manhattan. It is a scene befitting the luxury and amenities of this towering five-star hotel at the southern tip of the neighborhood.
  
  Sharing such treatment are the hotel’s residents, whose condominiums, with a separate lobby entrance, occupy the 40-story building’s upper 26 floors.
  
  “It’s absolutely gorgeous,” said Carl Accettola, showing a reporter around his 26th-floor apartment, with its spectacular views north, south and west. “When I first came up here, I fell in love with the place.”
  
  But while the views won’t change, there are worries among residents like Accettola that the good life of hotel living may be coming to an end.
  
  Two years ago the owners, Millennium Partners, a real estate investment firm, put the building up for sale, according to The Real Deal, and it remains in the company's portfolio. But resident leaders say that another giant real estate investment firm, Westbrook Partners, has been in talks with the Battery Park City Authority about a change to the building's ground lease that would enable a developer to convert the hotel to apartments. In 2012, Millennium Partners sold the Ritz-Carlton Hotel on Central Park South to Westbrook Partners for a reported $150 million. (The residents leaders have said they believe that Westbrook Partners now owns the Ritz-Carlton Battery Park.)
  
  “This is a high-end residential building,” said Accettola, who moved with his wife Danielle into the Ritz-Carlton, a second home, nearly five years ago. “If they were to go with an all-apartment type setup we wouldn’t have the difference from all the other buildings in the area.”
  
  The conversion would not only mean an end to luxury hotel services and a prestigious hotel address, the residents complain, but also the devaluation of their apartments, where two-bedroom units are now on the market for about $3 million and up.
  
  “We bought with the representation that this was a first class hotel and what we were purchasing was unique,” said Louis Grandelli, president of the residential condominium board. “And for them to add another 100 or 150 units next door, it’s not unique any more.”
  
  Sol Reischer, another resident leader, moved with his family from Gateway Plaza to the Ritz-Carlton when the hotel opened soon after 9/11. He said that the additional hotel services were important for his daughter, who has special needs, as well as some other residents who rely on the help of hotel staff.
  
  "We had assistance all the time and that was important to us," Reischer said.
  
  The potential for a residential conversion would likely make the property more valuable if the Battery Park City Authority allowed a change to the ground lease. But there is yet another hurdle. A city law passed in June created a two-year moratorium on owners of hotels with more than 150 rooms from converting more than one-fifth of those rooms to residential use. (The Real Estate Board of New York is challenging the law.)
  
  According to the authority, there has been no formal request to change the ground lease.
  
  “If such a formal request were ever made,” the authority told the Trib in a statement, “it would have to be considered within the parameters of the law, which currently restricts conversions of more than 20% of a hotel’s rooms to condominiums to very limited instances.”
  
  One of those “instances,” resident leaders say, may be a hardship claim that the hotel is a financial loser. It is a claim, they insist, the authority should reject.
  
  The authority, whose board took up the matter of a "sale or lease" of the property in a closed-door executive session in July 2014, would not comment on its position if a hardship claim were to be made.
  
  In a September resolution, Community Board 1 supported the residents, saying that the authority should "weigh the effects" of more residents on the infrastructure and services in the area, and the absence of an "anchor hotel" in the neighborhood. "There should not be any changes to the ground lease," the resolution stated.
  
  "It's offensive to us that someone could come in on a whim...and change the ground lease and make a lot of money," Ritz-Carlton resident Lisa Paige told CB1’s Battery Park City Committee. "Sure they can make a lot of money, but is that right for everyone else?"

Source: Ritz-Carlton Residents in Battery Park City Fear End to 'Unique' Hotel Life (The 40-story Ritz-Carlton is residential above the 14th floor, with about 300 hotel rooms and 150 condominium apartments. Residents fear that if the building becomes totally residential, there will be a loss of services and real estate value).