It is for us the living, rather: Part 3, Shall not perish from the earth

December 19, 2014 | Archeology, Cemetery, Development, Easement, Encumbrance, Hartland, Homeownership, Housing, Land use, Title, Vermont, Zoning | No comments 148 views

 [Continued from yesterday’s Part 2 and the preceding Part 1.]

By: David A. Smith

We here highly resolve that these dead shall not have died in vain

During yesterday’s Part 2, Mr. Guite prevailed in court (back in 2011) and proceeded to relocate the cemetery. Bringing in the University of Vermont’s Consulting Archeology department to handle the excavation of the remains, then their re-internment.

Sources used in this post

AHI blog post: Negative equity, Glebe land (April 7, 2009; buff blue font)

Vermont Standard (July 7, 2011; green font)

AHI blog post: Til Death Do Us Part, and not even then (November 12, 2013; brick-red font)

Valley News (November 17, 2014; navy blue font)

The Boston Globe (November 30, 2014)

Once the cemetery has been relocated, it faces the new criticism that it’s not ruined enough:

Among the rough clumps of recently mowed vegetation, the tombstones themselves, many just worn chips of rock, are laid out in rows that are too geometrically precise to have endured many decades of shifting ground.

One tombstone, which Guite paid to restore, memorializes Noah Aldrich’s remains with the opening lines of a funeral hymn written in 1734.

Give these sacred relics room,” it reads, referring to Aldrich’s physical remains, “To seek a slumber in the dust.”


Make room!  Make room!

Interesting, the hymn’s line is also given as ‘a while to slumber in the dust’, implying impermanence.


If you look closely at this tombstone in Kirkland, Colvend (Inscription 5), David Smith is interred here

Guite says he has upheld the spirit of those words, by moving the cemetery to a more sensible place in the most respectful way he could.

Critics say Guite’s desire to build a house wasn’t a good enough reason to move the bodies in the first place.  

Anyone who says something isn’t a ‘good enough’ reason has made a fundamental mistake in logic: if an obligation is absolute, no reason is good enough; but if the quality of reason figures in the decision, then the requirement isn’t absolute, and we are once again in the clutches of the taste and morality police.

They say the remains of Aldrich and his family have had their slumber disturbed in a way that won’t soon be forgotten.

It’s evident that some townspeople, having invested emotional energy in opposing Mr. Guite and therefore potentially having to find reasons to dehumanize him, decided to put on their best grudge faces.

On farms and fields, in courtrooms and coffee shops, the saga has stoked anxieties here about the finality of our final resting places.  

Our resting places are never final, because we are never here forever.

Opponents acknowledge that Guite, who paid for the archeologists, did the grim work with more care than was required, but they say that’s not the point. “We’re only here for a short time,” said Mowry. “I don’t have the right to undo something that should be there for the next generation.”

Is then everything in the past sacrosanct?  Or are the only acceptable human actions the ones done before us? 

All over places like Hartland, out-of-towners “bring all their ideas with them from down country,” said Gordon Richardson, chairman of the board of selectmen and a lifelong resident of his family’s farm.

I wonder, does Mr. Richardson’s opposition to new ideas extend to (say) the internet, to the cell phone, to electricity, or to motor cars?  All of these were once new ideas, and I dare say Mr. Richardson uses them every day.


Hartland and I-91, which its denizens undoubtedly use

“They put stones or something on this cute little path. And they put solar lights all along it.”

I take it solar lights are worse than regular lights.

“And they plant trees you buy at a nursery that have been trimmed to a shape.”

The land in these parts “was perfect before they touched it,” he said.

Sanctifying a mythic past is a tricky business, because the past we selectively remember may not be the past that actually happened.

One thing the researchers found, and this is an important detail to Guite, is that the site had already undergone a significant number of small changes, disturbances and alterations that undermine the idea that the human remains interred there had been left undisturbed.

Such alterations cannot be surprising, and I understand Mr. Guite’s sense of vindication at the discovery. 

Some of the gravestones had been moved by previous caretakers, while two of the children’s bodies had been dug up and removed, probably at the behest of family members who had moved away.

Eventually, for all that we wish it to be eternal, a dead body is just a collection of bones, and the person who inhabited it just a collection of memories and media.

Nature, too, played a role.

“I’m pretty sure woodchucks got involved and had scattered remains pretty far afield,” Kenny said.


On behalf of woodchucks everywhere, I object!

King had the support – moral, if not legal – of the Vermont Old Cemetery Association. Tom Giffin, president of the association, said Monday that it’s unfortunate that the court ruled as it did and that the association had been following what he called a “long drawn-out affair.”

“Genealogy is so important in Vermont,” Giffin said. “If you move or remove one cemetery in the state, you’re losing a part of Vermont history. If you do that, you’re losing a part of the nation’s history.”

No, the history was not changed; the present has been changed, and that is the prerogative not of money but of property ownership. History is the accumulation of people’s activities, their triumphs and tragedies, loves and losses. 

More than respect for the dead was behind the change; also, protecting something time-honored and local from the influence of outsiders.

If respecting the past means never modifying the present, then our future is bleak indeed.

“It’s a part of your town’s history that just got changed, because someone has money,” Marchant said.

Now the envy surfaces; psychologically, what galls is not what Mr. Guite does, but that he can do it without his neighbors’ approval. 

In interviews earlier this month, Guite said he wasn’t some predatory rich guy swooping into Hartland to build a mansion.

He is, in fact, preparing the land to be a Vermont farm, planting sugar maples and walnut trees.

“I’ve been here for 25 years, and feel from here,” said Guite, who has homes in Springfield, Vt., and Connecticut.


Mr. Guite testifying about telephony and broadband in Vermont

For some, that will never be enough. Mowry said Guite is one of many rich newcomers “buying up great globs of land, who’s not going to contribute to the town….

What I hear isn’t preservation, it’s envy or jealousy.

They take the best land and the best views, and they close it off to everybody else.”

Ms. Mowry is projecting fear, not citing evidence.

As much as people here love their land the way it is, most also respect the right of others to tend theirs the way they want, [selectman] Richardson said. Guite, in this view, was within his rights, but made no friends in exercising them.

Guite believes that some of those who most fiercely defend Vermont’s culture are not people who were raised here, like Richardson, but transplanted flatlanders wedded to a rustic fantasy version of Vermont and protecting it with a converts’ zeal.

Nostalgia ain’t what it used to be.


“Nothing was what it used to be – not even nostalgia.”

As for Guite, he said that he was happy to have the issue over with.

“It’s very pleasant to have it resolved but it’s frustrating to have spent two years on it when it should have been a very simple decision,” Guite said.

“Woodstock has a way of politicizing litigation that’s really frustrating. The precedent (for this case) has been known for centuries, it just had to be dragged out.”

And it became personal, which it should not have been.

“[Some newcomers] live in a world where they believe Vermont must be this old way,” Guite said.

To that end, preservation groups successfully pushed a change to state law that made it more difficult to move a cemetery, said Charlie Marchant, secretary of the Vermont Old Cemeteries Association.

Mr. Marchant has taken his hobby and made it a commendable passion:

Marchant, 70, drew national attention 10 years ago [i.e. 2004], when he found a wrought iron gate in a Newfane, Vt., antique shop and, after a dogged investigation, returned it to the grave of American poet Emily Dickinson’s father in an Amherst, Mass., cemetery.

That is dedication.

Among the new restrictions — passed too late to apply to Guite — is a requirement that the move must be made for public good, not private benefit.

Tell that to the woodchucks.


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It is for us the living, rather: Part 2, We cannot consecrate

December 18, 2014 | Archeology, Cemetery, Development, Easement, Encumbrance, Hartland, Homeownership, Housing, Land use, Title, Vermont, Zoning | No comments 120 views

[Continued from yesterday’s Part 1.]

By: David A. Smith

It is altogether fitting and proper that we should do this.

In yesterday’s Part 1, we encountered Michel Guite, for several decades a part-time resident of Hartland, Vermont, who bought a quarter-square-mile plot of land in the middle of which was located a tiny (0.025 acre) burial yard established in the 1840s by Noah Aldrich, and left undisturbed for roughly 160 years, when its potential relocation became the subject of private litigation begun by the site’s former owner, Jerome King:

Mr. King said he had buried his parents’ ashes in the little cemetery — Guite disputes whether the Kings were ever buried there — and was not keen on the idea of Guite evicting them.

In 1980, my father was cremated, and his bones and ash passed through my and the family’s hands onto the church yard.  In 2010 my mother was cremated, and her bones and ash passed through my and my siblings’ hands onto the church yard.  A month ago my father-in-law was cremated, and his bones and ash passed through my and Nancy’s and her family’s hands onto their lawns.

Sources used in this post

AHI post: Negative equity, Glebe land (April 7, 2009; buff blue font)

Vermont Standard (July 7, 2011; green font)

AHI post: ’Til death do us part, and not even then (November 12, 2013; brick-red font)

Valley News (November 17, 2014; navy blue font)

The Boston Globe (November 30, 2014)

I would not dream of claiming any of those places are thereby hallowed forever.  They have meaning for some, but not for all.

The three-year legal battle between Guite and the late Jerome King, a former antiwar activist and political science professor whose parents had bought the property in 1950, drew national media attention, much of it unfavorable to Guite, who was frequently portrayed as an out-of-state millionaire using wealth and influence to obliterate a piece of Vermont history.

Of course that’s how Mr. Guite would be portrayed, because its’ endemic to anti-developer discrimination universal in the media.

Guite lives in Springfield, Vt., and also owns a Greenwich, Conn., property assessed at more than $2.3 million in 2013.

Though locals may resent newcomers, the business model of rural society is poverty, and one thing the newcomers bring, money, can improve the town directly and indirectly. 

It has also fed fears about out-of-towners — derisively called flatlanders — buying up property in a place where the bond people feel with the land remains uncommonly strong.

Nor are entrepreneurs the worst people to have as neighbors:

After the Kings sold the property in 1983, it passed through the hands of other owners; it was eventually purchased by the Unified Buddhist Church [Possibly now defunct – Ed.], which ran afoul of an environmental group when its plans to establish a retreat and meditation center on the site became known.

Right, can’t have anyone being spiritual and meditating – this is Vermont!

During the protracted legal battle that ensued, courts focused on the convoluted history of the cemetery’s ownership. Guite’s opponents, operating under the mistaken impression that Aldrich was a veteran of the War of 1812, arrived at hearings in period costume.


We’re here for the litigation

When you do not have the law on your side, turn a proceeding into political street theater.  Indeed, it’s reached the point that whenever I see political street theater, I conclude instantly that those so acting out must be in the wrong, because if they were in the right they wouldn’t need to resort to such hijinks.

Guite said he understands the appeal of the story, but believes he was unfairly maligned.  “If you believe it, then it’s a blast. It’s a fantastic story,” he said. “But none of those things are right.”

For one thing, he said, Noah Aldrich never served in the War of 1812.

All of us have the tendency to canonize those whom we support or on whose absent behalf we claim to speak.  Fortunately, records are not interested in myth.

Mowry conceded that Aldrich’s status as a war veteran had been a mistake; a different Aldrich had served in the war during the same time period, which led to the confusion, she said.

As the editors of Rolling Stone might say, never let the facts get in the way of a good story.

The opinion handed down by Supreme Court Justice John A. Dooley places emphasis on the line “excepting out of the above described premises,” and, Jerome King said Monday, much of the decision may have hung on the crux of those semantics.


A face not easily impressed by political theater: Justice Dooley

Lower courts found for King [meaning that the land was entailed, like the Wallbanks’, and had to be maintained by any buyer regardless of consequences], but this war had a clear winner: The Vermont Supreme Court found in Guite’s favor in 2011.  The cemetery, it turned out, never belonged to Guite or to King; it belonged all along to the Aldrich clan.

“They started out by saying for many instances it looks as though ‘exception’ and ‘reservation’ were interchangeable … there was no sense of the reality of the people involved … the legal question was ‘what was the intent of the people who wrote the deed?’ and they boiled that down to exception or reservation,” said King.

That is certainly the plain meaning of ‘excepting out’.


The Aldrich Cemetery as it looked in 2008, located within a white picket enclosure.

The Vermont Supreme Court in 2011 found that the graveyard rightfully belonged to the Aldrich family heirs.

Because this meant the King family never actually owned the graveyard, the court found that King never had the right to bury his parents there, and therefore had no legal grounds on which to oppose the moving of the cemetery.

Mr. Guite had evidently known this, because long before he was brought into court, he secured his factual grounds:

Two dozen Aldrich descendants had given Guite their written blessing.

I presume that Mr. Guite offered to build a new cemetery and to relocate all the Aldriches (and anyone else found in the burial yard) to the new site.

The archeologists [hired by Mr. Guite] who exhumed the cemetery found 10 bodies in all, plus a cat, said Kate Kenny, a historical archeologist at the University of Vermont’s Consulting Archeology program.


Ms. Kenny patiently collecting oral history

Kate Kenny, who oversaw the exhumation, said her crew dug trenches alongside the cemetery boundaries and slowly worked their way sideways through the earth with whisk brooms and picks, careful not to let any bone shard or coffin nail escape their notice. When they got to a skeleton, Kenny said, they would “disarticulate the person, put the pieces into boxes and bring the boxes up to UVM” for testing.  Kenny has spent the last three years writing a 200-page report on the project.


Digging for information, not for infrastructure

The archeologists found Noah and Lydia Aldrich. Others were most likely relatives, Kenny said. They never found Louisa and Martha, instead digging up the remains of an unidentified and very large man who was at rest there.

There’s that fact about burial yards: if the records are fragmentary, you never know who you’ll find. 


Crock’s full of shards

UVM Professor and Program Director John Crock said it was of great value as a case study in the evolution of a family cemetery.

“He definitely went beyond the call of duty, certainly beyond the legal necessities, which I think was very respectful to the Aldrich family,” Crock said.

Certainly it provided a meaningful learning and scholarly exercise that the University of Vermont didn’t have to pay for, and that would not have been done had not Mr. Guite been so committed to his project.

Guite bought a coffin for each body — including the cat.

Obviously Mr. Guite long ago learned a basic principle: if facing unreasonable opponents, give them no grounds to be unreasonable.

“He jumped through all the hoops,” said Town Manager Robert Stacey.


Mr. Stacey’s opening slide for Town Meeting

The new cemetery is set close to Town Hill Road, and three white headstones, restored at Guite’s expense, stand in the rear of the enclosure. One belongs to Noah Aldrich II, who died in 1848; another to his wife, Lydia, who followed four years later. The third belongs to two girls, Louisa, 6, and Martha, 16 months, who died a day apart in 1850. Several unmarked fieldstones now stand atop the graves of those whose first burials were more humble.

Wouldn’t a reasonable person conclude that this was a highly satisfactory solution?

We cannot consecrate, we cannot hallow this ground.

[Continued tomorrow in Part 3.]

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It is for us the living, rather: Part 1, To be dedicated here

December 17, 2014 | Archeology, Cemetery, Development, Easement, Encumbrance, Hartland, Homeownership, Housing, Land use, Title, Vermont, Zoning | No comments 132 views

By: David A. Smith

We have come to dedicate a portion of that field

‘Forever’ is a concept that we human beings use all too cavalierly in ordinary conversation but that when written into a contract (such as a land-use agreement or title deed) reverts to its pure English-language meaning – ‘without end’ – and that can create complex problems if the document itself is older than any living person called upon to interpret it, as Michael Guite spent the last several years discovering, reported in The Boston Globe (November 30, 2014):

Dream of a manse on a Vermont hilltop runs into tradition, suspicion

Hartland, Vt. — For more than 150 years, [some of] the people who once farmed the picturesque land where J. Michel Guite at one time hoped to put his elegant new house lay buried in a little-visited cemetery on a hilltop.


Noah Aldrich II, who died in 1848 and was laid to rest in a cemetery on a picturesque hill on his property, is now interred at the base of that hill.

Sources used in this post

AHI blog post: Negative equity, Glebe land (April 7, 2009; buff blue font)

Vermont Standard (July 7, 2011; green font)

AHI blog post: Til Death Do Us Part, and not even then (November 12, 2013; brick-red font)

Valley News (November 17, 2014; navy blue font)

The Boston Globe (November 30, 2014)

Mr. Guite, the site’s owner and proposed homeowner-developer, is entrepreneurial, successful, and apparently rich (by virtue of the former):


Mr. Guite at a roundtable on bringing high-speed internet to Vermont

Guite, the founder of a small telephone company that serves Hartland and 13 other Vermont villages, paid $2 million for 163.9 acres of gently rolling hills and New England forest here in 2008.

Because of this, both his success and his purchase, Mr. Guite is evidently envied:

When he bought the property, he said, he envisioned a farmhouse at the top of the hill and made sure he could move the cemetery to build it there.

… and therefore resented:

Whatever his reasons, disturbing the ancient Vermonters’ eternal slumber proved disturbing to the living as well.

 “I don’t think everybody has the right to do everything they want with a piece of land,” said Carol Mowry, a past president of the Hartland Historical Society.


Historically speaking, America was founded on the principle that one could do what one wanted with one’s land

While Ms. Mowry expresses a view, common among incumbents, that newcomers should mind their place, defer to the incumbents, and leave things as they are, America’s founding was premised on, and its settlement was accomplished by, changing land use, building new societies, and the right of people to acquire property legally (via title) and develop it as they bloody well pleased.

Before Mr. Guite’s announcement of his development interest, the land and graveyard (being unfenced) were publicly accessible, and to hear him tell it, not always necrologically respectful:

The graveyard, Mr. Guite said at the time, allowed the public to wander onto what he planned to make a working farm. It had also become, he said, a lure for “a tiny number of people to come roaring up at two in the morning drinking beer.”

Probably male people, probably young male people, possibly in the company of young female people.

Six acrimonious years later, the remains reside at the bottom of the hill, painstakingly relocated to new graves by a team of archeologists.

As we’ll see, that painstaking relocation was done by Mr. Guite, though whether out of respect for the dead, courtesy to neighborhood wishes, or simple legal pragmatism remains a mystery.


Plenty of history in this plot, and plenty of plot in this history

Moving Noah Aldrich and his brood meant unearthing a lot more than their ancient bones.

Guite would learn, to his chagrin –


Do I look like I’m full of chagrin?

– that even his decades-long roots in the area weren’t enough to seal his Vermonter stripes — at least not for some.  And that the boundary between law and tradition can be a remarkably fuzzy one –

Here Globe author Nestor Ramos, either out of ignorance or willful initiative to dramatize the story, simply gets it completely wrong.  The boundary isn’t fuzzy at all, it’s quite clear, and Mr. Guite knew it was clear and took appropriate steps, and these facts nettle some of his neighbors.

– making it hard to unearth exactly what someone can acceptably do on their own patch of green.

The metaphor of unearthing is likewise totally wrong: the relevant evidence was plain from the beginning, as reported three years ago in the Vermont Standard (July 7, 2011; green font):

The graves in question are those of Noah Aldrich, who died in 1848, and two of his grandchildren, and the cemetery itself was sold by the Aldrich family in 1853 with a deed that specified, “excepting out of the above described premises 41 feet of ground by 27 feet which is the burying ground on said premises.”

As readers will recall, burying one’s dead on one’s property is a tradition that goes back millennia, and it’s one that urbanization has gradually taken away from Americans, as I reported in November, 2012 in Til Death Do Us Part, and not even then:

A person who owns property owns the rights upward into the empyrean realms and downward to the center of the earth; that’s English common-law doctrine, dating back at least to the thirteenth century with the magnificently portentous Latin phrase Cuius est solum eius est usque ad coelum et ad inferos – “even unto heaven and hell.”  While the ad coelum doctrine has been modified due to air travel (a deemed easement right of passage), the ad inferos component of those property rights is (or ought to be) sacrosanct – until a stubborn and loving codger decided to use those rights, reported at the story’s end by the New York Times (October 22, 2013):



James Davis buried his wife in the front yard to fulfill her dying wish.

Burying our dead is as old as human society; shriving, interring, preserving date back beyond the pharaohs.


We’re giving you a proper sendoff

The rituals are intimately involved with religious and pre-religious means by which humans grieve, and how we express love for those we knew by preserving their physical remains as an offering to preserve their spirits within our memories and hearts.

“The [Aldrich] family selected that place. They picked the most beautiful spot on their land to put the people they loved,” said Carol Mowry.

Perhaps so … but only five years after picking that lovely place, the Aldriches sold the land, and thereby surrendered all rights to it, except the burying ground with the curious exception provision.

At issue was whether this original deed created what’s called a “fee simple,” provision – which gives total ownership to the Aldrich descendants – or if it was an easement, which would carry the right of ownership to whoever was in legal possession of the land.

Said in land-use speak rather than legal speak, there are two possible interpretations of the burial yard exception:

  1. The Aldriches retained ownership of the 41×27 burying ground; they didn’t sell it at all
  2. The Aldriches required preservation of the graves by the buyer; they sold it subject to a maintenance obligation.

Which did the Aldriches and their buyer intend? 

Among the many who objected to Guite’s plan was Jerome King, whose family owned the farm from 1950 to 1983.

Clearly Mr. King felt no need to enhance or clarify the deed restriction, which he could easily have done either judicially (during the 33 years he owned the land) or when he sold it to the next owner – from which I deduce he gave no particular thought to the burial yard when he owned it or sold it.  That invites the conclusion he burial-yard-maintenance obligation, if it existed, had lapsed.


Noah Aldrich, re-interred in the new cemetery at the hill’[s base

The concept of land ownership carrying with it ongoing obligations, either of maintenance or of contribution to village infrastructure, dates back over a thousand years, to medieval England, where ‘village infrastructure’ was the church, as I posted back in 2009 in Negative equity, Glebe land; buff blue font):

Before there were cities, there were parishes, who dispensed moral guidance and spiritual salvation – both highly valuable assets – in exchange for being supported from the community. 


The law in question dates back to medieval times, when the parishioners had a duty to repair the nave  –  the part of a church in which the congregation sits to worship  –  while the rector had a responsibility to repair the chancel end. 


A rector would pay for his share of the repairs using income from land attached to his rectory – ‘glebe land’ – as well as from tithes.



Mansewood: All the land inside the triangle was glebe land

Note the relation between church and manse


Tying the obligation to land reflected medieval reality — land was the source of wealth, so an assessment against farmland could be expected to be ‘in the money‘ – satisfiable without undue hardship.


After the dissolution of the monasteries, that land was dispersed but never separated from the obligation to pay for chancel repairs, making the new landowners ‘lay rectors’.


In successive years, some of this land has been sold and re-sold, divided up, developed on and changed hands many times so that its history of liability has sometimes been forgotten.

All this echoes the Aldriches’ burial yard and the question of who is responsible for maintaining it, and whether that obligation goes forever.


The Wallbanks and the church their land ownership obligates them to maintain


Fast-forward to recent times, and the cash-strapped Church has been busy encouraging its Parochial Church Councils (PCCs) to seek out any lay rectors it can find  –  and quickly, because chancel repair liabilities will become unenforceable unless they are registered at HM Land Registry by 2013. 


Religion and churches are older than governments and towns, so with the advent of secular government, sooner or later all religious laws have to be harmonized with civil ones.  We see this in the US in the struggle over gay marriage (marriage being historically a religious state that now conveys secular status, benefits, and obligations); England must harmonize property rights that antedate the government now in power over the (still established) Anglican church.


The Wallbanks emerging from court

[Sidebar update unrelated to the current story: By 2012, the Wallbank case had gone national in an unexpected but predictable-in-hindsight way.  Many English churches are historic buildings listed with English Heritage; as struldbrug buildings, they cannot be torn down or converted, but instead are obligated to be maintained, and the English government has assumed the upkeep responsibility, because despite two centuries of campaigning for disestablishment, the Anglican Church is still the state religion of England, though not Ireland (1869), Wales (1920), or Scotland (1929).  The government’s inheritance of glebe land receivables and its matching obligation to provide grants to English churches led, via the Wallbanks, to a national outcry against zombie obligations, resulting in 2012 Parliamentary legislation requiring all such centuries-old obligations to be registered or they would be deemed to have lapsed.]

But, in a larger sense, we cannot dedicate,

[Continued tomorrow in Part 2.]

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One man’s windfall is another man’s score: Part 11, “I think most people will tell you yes.”

December 16, 2014 | Affordability, Affordable Housing, Co-ops, Democracy, Housing, Markets, Mitchell-Lama, New York City, Privatization, Urban renewal, Urbanization, US News, Zoning | No comments 120 views

[Continued from yesterday’s Part 10 and the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8, and Part 9.]

By: David A. Smith

As our survey of Southbridge Towers’ impending privatization reaches its conclusion, we can come back to the most basic question of all:

3.H. Whose wealth is it, anyway?


If it’s yours, then you own it … don’t you?

Privatization creates wealth and liquidity, and it transfers that liquidity (net of the increased real estate taxes, which I’ve previously mentioned have a capitalizable value of $215 million or so, and the potential real property transfer tax of $27 million) to the co-op’s owners.  Even net of those expenses, the aggregate value is breathtaking: over a billion dollars at an average value of $650,000 per apartment. 

Sources used in this post

New York Daily News (October 23, 2005; deep purple font)

Downtown Express, Letters to the Editor (November 2, 2006; robin’s-egg blue font (Michael Altman), gray-blue font (Jared Brown), teal font (Rosemarie Ferrara), and navy blue font (Michael Wishner))

Downtown Express, Letters to the Editor (February 1, 2007; lime font (Wallace Dimson), olive font (Stephen Seifer), and forest-green font (Seymour Schleimer))

Downtown Express (May 24, 2007; pink font)

Law360 (October 4, 2012; plum font)

Travel Studies blog (April 23, 2013; brick-red font)

Wikipedia on co-op flip tax; tangerine font

Should we privatize: No and Yes (Downtown Express, June 19, 2014; No from Victor Papa in red font, Yes from Jesse Mandel in green font)

DNA Info the vote (October 1, 2014; charcoal-gray font)

The Broadsheet Daily (October 7, 2014; pecan font)

Downtown Express (October 15, 2009; caramel font)

Broadsheet Daily (November 6, 2014)

The New York Times (November 14, 2014)

Because Mitchell-Lamas are highly regulated, any two minutes’ Googling will produce many more factual links, such as this, this, this [Its 2013 audited financial statement], this (search for ‘Macrucilli’), and this; eventually, in mental-health self-defense, I had to stop.

For most people this is big money and a big life opportunity:

[2009] Louis Trazino, a former board member, said he sees no downside to suddenly having a valuable piece of real estate in his name.

Every week these people go out and play the lottery,” Trazino said of his neighbors. “They drop a dollar on something they’re never going to win. But here these people have already won the lottery, and all they have to do is have the courage to step into the future.”

Ownership of housing is forced and invisible saving, and that makes it a powerful lever of positive life change.

Trazino’s family has lived Downtown since the 1890s, but he would be the first one to own property here — and he said he wouldn’t want to miss the chance to pass on the apartment to his two children, 11 and 13 years old.

Is it too much to call this the American Dream?

For the shareholders who support the plan, privatizing provides options they did not have before. They can take out home equity loans to pay for college for their children, purchase and combine existing units to create a larger home, or sell and move elsewhere in an expensive city.

As current Board chair Mr. Dimson said it:

Moreover, Mr. Altman significantly underestimates the power of equity to improve people’s lives. Taxes and fees are costs associated with conducting business in a market economy. The tradeoff is that the equity that Southbridge residents will acquire at no cost will enable them to secure their retirement, relocate, provide for home health care, or leave an inheritance to their children.

Wallace Dimson

People like this:

 “People say it’s closing the door and it’s true, but this helps generations to come for the people in Southbridge,” said Rachel Nash, 38, a lawyer who lives there with her husband and 7-year-old twins and supports privatization. “My children will have more financial security than they would have had otherwise. If it is helping me, it helps them even more so.”


Seeing the value of ownership

4. What happens next

The vote has been held, and as of the Times article’s date, the owners were awaiting DHCR confirmation of its validity.


What is the verdict, m’lud?

A memorandum circulated by the Southbridge board of directors to residents on October 29 says of the HCR review, “both HBA and Southbridge have responded to these inquiries in a prompt and complete manner. While we expected the review process to be completed sooner, it is our understanding that we can now expect that the Attorney General will respond to the voting amendment on or about November 13, 2014. If this timeline is maintained, shareholders will receive a copy of the amendment on or about November 24, 2014.

[As of this writing I couldn’t find any update on the internet; I’ll come back to this story some months from now and see what the updates are. – Ed.]

At that point, the Exclusive Period will commence, during which shareholders will have 90 days to decide whether they wish to participate in the plan or opt out.” This refers to a 12-week period (following the date on which the Attorney General’s office certifies the results of the September vote as valid), during which the Southbridge privatization offering mandates that two-thirds of the residents must agree to participate in the plan.

I expect the vote will be upheld; that’s what the previous five years’ preparation was for.

If no irregularities are found in the voting process, shareholders then must choose one of three options.

[1] They can agree to participate, which means they become shareholders in a market-rate development.

[2] They can relinquish their shares to the co-op, get their equity back and leave.

[3] They can relinquish their shares and stay on as rental tenants with annual rent increases of no more than 5% a year. As renters, they would lose their stature as shareholders, but they would not risk paying steep maintenance increases should costs rise.

Option [2] is economically ludicrous in Southbridge Towers, so its inclusion must be a statutory or regulatory requirement.


Option 2? That’s ludicrous!

In order for the plan to become final, two-thirds of the shareholders must agree to become market-rate shareholders. If this occurs, residents could begin selling their apartments by next summer.

Quote DImson about people who vote No before the dissolution, then once they know it’s going forward, the inevitability effect takes over and now it would be foolish to vote No.

At this point, moving forward with the privatization still requires one more step. Two-thirds of residents will have to sign an agreement to “opt in” to the privatization. They will soon receive the agreement and will have 90 days to sign, Dimson said. Residents can choose to “opt out” of the plan, which will essentially make them renters, who do not have the ability to sell their apartment. Rents will be below market rate, but can increase up to 5% each year.

Actually, I expect the individual votes to buy co-op homes to be much higher than 67%.  The reason is simple: when voting whether to privatize or not, you were hoping to influence the aggregate vote – but once that vote is lost and you know the privatization is inevitable, the decision you make is entirely personal, and your choices (as we just saw) are different; and becoming a tenant means, if I understand things correctly, that you forfeit the chance of eventual residual value in your apartment. 

[2009] Joe Scelso, 81, said that even if his maintenance charges go up because of higher taxes, the benefit of owning Manhattan real estate without putting any more money down far outweighs any short-term costs. Also, he pointed out that under privatization, residents would be allowed to give their apartments to family members or leave them to family members in their wills, which is not allowed now unless the relatives already occupy the apartment.

And remember, to buy the apartment takes no cash; it just means a change in your potential monthly occupancy cost from the increased real estate tax assessment.  I can see a resident remaining a tenant if he or she is very old, or very poor and with no family, but any resident with family honestly, if you have family, whether you’re poor or not you’d have rock in your head not to buy your apartment.


Can we buy apartments here?

Personally, I’ll be quite curious as to what Mr. Hovitz, Mr. Altman, and the other opponents of privatization will do.  If I knew them, I’d advise them to set aside their commitment to abstract others and do what is more appropriate for themselves and their families – namely, buy their co-op homes.  In my view that’s not the slightest bit inconsistent or immoral, so I hope they do it.

“If you have an opportunity to have ownership of a piece of Manhattan real estate in one of the fastest growing areas, does that outweigh any of these negatives?” Mr. Dimson said. “I think most people will tell you yes.”


A man for whom the positives outweigh the negatives: Board chair Wally Dimson

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One man’s windfall is another man’s score: Part 10, “Extremely unlikely…but it’s budgeted for”

December 15, 2014 | Affordability, Affordable Housing, Co-ops, Democracy, Housing, Markets, Mitchell-Lama, New York City, Ownership, Privatization, Urban renewal, Urbanization, US News, Zoning | No comments 140 views

[Continued from Friday’s Part 9 and the preceding Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, and Part 8.]

By: David A. Smith

Friday’s Part 9 nearly completed our review of the public-policy implications of a Southbridge Towers privatization in the changing demographics now (slow income concentration) and after privatization (slow aspirational gentrification), as well as the desire by many, particularly elected officials, to keep the housing affordable even though the government has long since stopped providing subsidy or financial incentives to do so.


Providing ongoing subsidy isn’t my problem

Sources used in this post

New York Daily News (October 23, 2005; deep purple font)

Downtown Express, Letters to the Editor (November 2, 2006; robin’s-egg blue font (Michael Altman), gray-blue font (Jared Brown), teal font (Rosemarie Ferrara), and navy blue font (Michael Wishner))

Downtown Express, Letters to the Editor (February 1, 2007; lime font (Wallace Dimson), olive font (Stephen Seifer), and forest-green font (Seymour Schleimer))

Downtown Express (May 24, 2007; pink font)

Law360 (October 4, 2012; plum font)

Travel Studies blog (April 23, 2013; brick-red font)

Wikipedia on co-op flip tax; tangerine font

Should we privatize: No and Yes (Downtown Express, June 19, 2014; No from Victor Papa in red font, Yes from Jesse Mandel in green font)

DNA Info the vote (October 1, 2014; charcoal-gray font)

The Broadsheet Daily (October 7, 2014; pecan font)

Downtown Express (October 15, 2009; caramel font)

Broadsheet Daily (November 6, 2014)

The New York Times (November 14, 2014)

Because Mitchell-Lamas are highly regulated, any two minutes’ Googling will produce many more factual links, such as this, this, this [Its 2013 audited financial statement], this (search for ‘Macrucilli’), and this; eventually, in mental-health self-defense, I had to stop.


It’s just a vote, dear, not the end of the world

Much of the sturm und drang you may read about the adverse tenant consequences of Mitchell-Lama privatization arises from people unhappy at the prospect or consequences of a rental Mitchell-Lama conversion.

For supporters of Mitchell-Lama, the Southbridge vote delivers a painful blow.

One cannot let that statement pass unquestioned: as it implies that supporting the program means expecting a property to stay in it forever. 

“It’s a sad day for affordable housing in New York,” said John Fratta, 61, the only member of the 15-member Southbridge Towers co-op board to oppose the decision. “It’s really a tragedy.”


Mr. Fratta on his balcony, looking west

A tragedy for whom?  Clearly not for the current residents, who voted for it by a two-thirds majority, but that didn’t prevent some local elected officials, perhaps drawn by the prospect of favorable press coverage, from weighing in:

In early October, board members who don’t want privatization (for reasons unknown) had an open meeting against privatization. The guest speaker invited by those who didn’t want privatization was Borough President Scott Stringer.

[Illuminating personal sidebar details about Mr. Stringer from November 6, 2014 here. – Ed.]


Asking the NYPD to drive his wife to work

Three times he mentioned getting thrown out. Thank goodness the majority of residents at the meeting were for privatization. When he was pinpoint-questioned on being thrown out, he backtracked and said he was talking about a different housing situation and not our situation, admitting no one in Southbridge could be thrown out if we go private. The question and answer part of the meeting was abruptly ended when things were not going the way certain anti-privatization parties anticipated.  

Michael Wishner

3.G. Does the state/ city win from the transaction?

We’ve already seen that the City of New York will gain a significant revenue stream from higher real estate taxes – $6,450,000 annually and then rising, which at New York City’s bond rate (roughly 3.0%) has a capitalizable value in the vicinity of $215 million, which the city could monetize tomorrow if it wanted to devote that sum to building new housing.  Additionally, opponents of privatization have suggested that the state itself would win another large amount on the privatization:

The development could also be on the hook for a $27.77 million transfer tax if the New York State Court of Appeals rules in favor of the city in an ongoing case involving a former Mitchell-Lama development in Coney Island that privatized in 2007.

While this argument was presented without analysis in the Times piece, from my own experience I was pretty confident that the ‘Cuomo tax’ (as it was known in real estate circles) wouldn’t apply here; the wondrous research tool The Google surfaced a reference list, a brief exposition, and what I consider a compelling refutation of that claim:

Coney Island High-Rise Dodges $21M Transfer Tax On Appeal

By Karlee Weinmann

Law360, New York (October 04, 2012, 1:46 PM ET) — The owners of a Brooklyn, N.Y., high-rise do not have to pay a $21.2 million tax improperly tied to the complex’s exit from an affordable housing program, a New York Court of Appeals panel ruled Wednesday, reversing a lower court’s order that the city-leveled tax should stand.

As the issue relates to state law (in this case, the state’s real estate transfer tax), it must be litigated in state courts, not Federal, and the NYS Court of Appeals is the second highest court in the state, so the decision has plenty of weight, especially as it was unanimous (hence less likely to be reversed on a subsequent state-supreme-court appeal):

A change in ownership is the basis for the tax.


Ownership means transfer of the title deed

A Mitchell-Lama conversion, as we’ve seen, is not a change in ownership: the shareholders are the same after as before.  Nor is it a real estate transfer – no new deed is signed and recorded.  Hence on the plain meaning of the statutory words, the Mitchell-Lama dissolution isn’t a transfer:

In a unanimous decision (
pdf here), the appellate panel said Trump Village was shielded from the real property transfer tax, or RPTT, because when it shifted from an affordable housing complex to a corporation in 2007, its shareholders remained the same.

[When it privatized], Trump Village stripped all Mitchell-Lama references and associations from its certificate of incorporation, bylaws and stock certificates. It issued amending stock certificates in the same quantities to existing shareholders to complete its transformation to a private cooperative corporation.

In earlier parts of this post, I mentioned that regulators tend to invent, discover, or discern new obstacles to leaving their regulatory net, and here New York City did not disappoint:


New York officials first slapped Trump Village with a notice that it owed the $21.2 million tax in 2009, two years after the complex’s shareholders opted to leave the Mitchell-Lama program, designed to spur the development of housing for low- and middle-income families in New York. Trump Village’s decision to reconfigure itself came after it repaid low-interest government loans received as part of the program.

Perhaps the NYC DoF was seeking to discourage other entities like Southbridge Towers (which had voted to proceed with privatization and had filed the initial draft prospectus with the NYS attorney general’s office).

New York City Department of Finance had contended that Trump Village, a collection of three 23-story buildings at the border of Brooklyn’s Coney Island neighborhood, warranted the tax in choosing to shift away from the state-sponsored Mitchell-Lama affordable housing program and reincorporate itself.  The city has said that in the switch, Trump Village essentially became a new corporation, taking the reins from an “old” Trump Village in what amounted to a property transfer, the opinion says.

‘Essentially’ is a tipoff word – translated, it means The words don’t say what we want, so we want you to reinterpret them. 

The housing complex’s owners [that is, all its co-operative residents] had contended that the transfer tax only applies when property or economic interests in it changes hands — not, as in its case, when the property kept all its same shareholders at the same levels, as it did through its transition out of the Mitchell-Lama program.

In general, courts dislike being asked to redo the legislature’s job by rewriting what the legislators wrote – it’s fundamental high-school-civics separation of powers and statutory construction for the courts to reject what I call the Humpty Dumpty argument:

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master—that’s all.”


Let me see those arguments, young lady

But the appellate panel couldn’t cobble together case law to support the city’s logic.

“Upon amending its certificate of incorporation, Trump Village remained the same entity, although it was relieved of various restrictions previously imposed upon it by the Mitchell-Lama housing program,” the opinion says. “Accordingly, the city has failed to establish … that the RPTT was applicable to Trump Village’s actions and, thus, failed to establish that the RPTT was properly imposed upon Trump Village.”

Naturally, this being the government the owners were suing, the government having imposed a contested tax, the government required Trump Village to post the cash collateral before contesting it.


You want to challenge the tax?  Post it first

New York State Supreme Court Justice Richard Velasquez was unconvinced in earlier court proceedings, ordering Trump Village in February 2010 to pay the multimillion-dollar balance on its tax tab. Trump Village brought the original suit to challenge the RPTT in October 2010.


Judge eng

Presiding Justice Randall T. Eng and Justices Peter B. Skelos, Ariel E. Belen and Jeffrey A. Cohen sat on the appeals panel. In light of its declaratory judgment, the panel remitted the case to the lower court for entry of a judgment declaring the tax was improperly leveled.

The Southbridge Towers privatization proponents addressed the potential transfer tax head on:

It’s extremely unlikely either ruling will be overturned on appeal. But it’s budgeted for, under any circumstances with a contingent, 33%, rather than 28%, transfer fee (flip tax) on first-time free-market sales post-reconstitution.

In other words, if the current decision were reversed by the New York State Supreme Court, then Southbridge Towers would bump its flip tax by five points to create the extra revenue necessary to cover its payment without disturbing the remaining residents.

[Continued tomorrow in Part 11.]

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