BBP Members Among The First To Own A Pierhouse Tower Condo… Because What Else Did You Expect

By on September 25, 2015 9:00 am in brooklyn bridge park, Brooklyn Heights, News, Real Estate

In case you thought this story couldn’t get any loopier (or fade into obscurity), DNA Info NY reported that two of the BBP Board members — David Offensend and Henry “Hank” Gutman — were among the first to buy condos in the Pierhouse Tower in March 2014. According to the article:

Offensend, who stepped down from the park corporation’s Board of Directors in July, and Gutman, who remains on the board, got clearance from the city’s Law Department to buy units in the tony building, which includes a screening room, a pet wash station and a “young adults study” room, according to documents filed with the state.

If you think this all sounds kinda fishy, BBP VP Belinda Cape wants to assure you that the men “adhered to the park’s code of ethics“.

Gutman, who is also involved with that lovely little Brooklyn Heights Library project, helped clear the way for the two BBP towers to be built last August while allegedly using children as a human shield.

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  • DIBS

    Why wouldn’t they want to own in a place they invested so much time in? It was reviewed by a few layers of attorneys. I see no conflict of interest here at all. Just the opposite.

  • CHatter

    The conflict is not difficult to understand. A director is not disinterested if s/he has a personal interest (pecuniary or otherwise) in the matters deliberated and decided by the board. Conflicts happen all the time, and they are not necessarily illegal or evil. However, they are still conflicts. A heightened standard applies to decisions taken by Board members having a conflict — specifically, they are not entitled to the automatic presumption that their actions or votes are made in good faith and in the best interests of the Corporation; they have to do more–disclose the conflict (which obviously these members did) and be prepared to demonstrate that their actions were loyal to the Corporation, not influenced by their personal interest or amount to self-dealing. That can be hard, so the typical (and wise) move is for the conflicted director to recuse himself from any votes or deliberations of the Board affecting the personal interest (or better yet, resign from the Board where, as here, *all* the deliberations are likely to be tainted by the conflict). This is a classic conflict. Again, not necessarily illegal, but nevertheless unwise in my view for these members to have remained on the Board.

  • E

    To the extent it’s not obvious, i’ll take a stab at describing why this is such an egregious conflict.

    As public servants, the Board members owe a duty of loyalty to the public. That means they have to put the public interest ahead of their own private interests.

    Here, the public’s interest was in getting the best deal — that is, in raising as much money for the park while giving away as little as possible in the form of public land and treasured views.

    Once they became buyers of the real estate, these Board members had an obviously conflicting interest — in creating apartments with great views and great amenities for the few lucky millionaire purchasers. They had a personal interest in / drew a personal benefit from the stuff on the roof that wrecked others’ views.

    It would be absurd for a corporation counsel to sign off on this. I wonder if the lawyers who signed off truly understood the factual nature of the conflict.

    Mr. Gutman should resign.

  • CHatter

    I generally agree with this, except for the part about a duty of loyalty to the public. The Board members owe their sole duty to the BBPC. In any case still a conflict, I agree.

  • R.O.Shipman

    There’s a logical flaw in your reasoning. They only purchased after the project began. By your own reasoning, the conflict only existed “once they became buyers” which was after they were involved in “getting the best deal.” So where’s the problem?

    They recused themselves from votes specific to the properties they bought into. They cleared the city’s conflict review. This is only a “scandal” to those that are predisposed to hate the development. The rational view is that two men who gave time to the development of the park were interested in buying property as close as possible to that park. It’s not really surprising. It’s like central park conservancy members being interested in apartments with a view of the park.

    Also, I don’t think the view ruining rooftop structures on the hotel portion is really a benefit to condo purchasers.

  • DIBS

    Yes, the rational view. Not the haters view targetting “millionaires” and calling into question whether or not lawyers knew wehat they were doing which, in the end, is just symptomatic of sour grapes.

  • e

    It seems to me that “getting the best deal” necessarily includes ensuring that the counterparty lives up to the deal you’ve struck. I understand the terms of the agreement on height restrictions have been disputed. But once the Board members bought condos for themselves, they could no longer police that deal in an unconflicted manner.

  • Michael D. D. White

    There are several other confluences of concern with respect to these gentleman that should sit uneasily when given careful consideration. Just as both of these gentleman are on the board of the Brooklyn Bridge Park corporation pushing for overdevelopment there, they are both involved in turning our libraries into real estate deals, including the Brooklyn Heights Library, Brooklyn’s central destination library in Downtown Brooklyn just a few block away. (The architect for the proposed 400 foot tower to replace and drastically shrink that library, Jonathan Marvel, is the same one who did the calculations resulting in the Pierhose being 30+ feet taller than it should have been.)

    Mr, Offensend, as chief operating officer of the NYPL, infamously sold off the Donnell Library for a pittance. Starwood wound up benefitting substantially as one of the new owners of the Donnell real estate even as Offensend was dealing with Starwood via the Brooklyn Bridge Park Corporation on these development transactions in the park. Offensend was also proceeding to sell the Mid-Manhattan Library and 34th Street Science, Industry and Business Library while demolishing the stacks of the 42nd Street Central Reference Library as part of the NYPL “Central Library Plan.”

    At the same time Offensend’s wife, Janet, went on the board of the Brooklyn Public Library where, with her involvement, the BPL formulated plans to replicate the sale and shrinkage of Donnell with the sale and shrinkage of the Heights library.

    Gutman is also on the board of the BPL pushing for these library sales and was one of the first testifying in favor of selling the Heights Downtown library before the Brooklyn Borough President (who didn’t but his spiel). Another overlapping board member of both the Brooklyn Bridge Park corporation and the Brooklyn Public Library pushing for both these kinds of overdevelopment is Peter Aschkenasy.

    Mr. Offensend went to the NYPL as Chief Operating Officer from the investment firm of Evercore, a spin-off of the Blackstone Group. The Blackstone Group is, among other things, the worlds largest real estate interment firm. The head of Blackstone, Stephen Schwarzman, an NYPL trustee pushing to turn libraries into real estate deals, transferred $100M to the NYPL on the understanding that the CLP with its associated real estate sell-offs would then be proceeding. (Blackstone owns a number of properties on Bryant Park in the vicinity of the libraries.)

    Mr. Gutman is a lawyer and his law firm is the principal firm that’s represented the Blackstone Group for many years.

  • Concerned

    Your view of the way things work versus reality is a major flaw in your reasoning. You use “events” and “actions” that you give false weight to. For example, your statement “the conflict only existed once they became buyers” gives false weight to a specific time. Your reasoning ignores that the buyers wouldn’t have been eyeing moving into the Pierhouse, much earlier. Do you really believe that the board members just decided one day to buy there!?! No, rational and business minded people are planning (some might even say “plotting”) way before then. Also, your recusal argument is even more illogical. It ignores the fact that board members (especially as powerful as these are) have power on votes/voting members, etc… without having to cast a vote.
    Your arguments fall along the exact line that these smart board members want you to believe. These arguments work often in a trial where the Judge is the decision maker, but rarely when there is a jury as a decision maker. This is simply because so many of us live in the real world where we know that most of those in power are working the back door channels that only they have access to, while closing the front doors and covering their behinds so that those knocking to get in are denied and blinded to the process.
    I’m not sure what these board members used this power for (if anything), my argument is only against your giving them a free pass without logical inquiry.

  • HereToStay

    Guess what? NOBODY CARES… There are about 10 people who care and they all live on this blog. I don’t understand why there is SO MUCH attention paid to this building. Give it up already. So they bought apartments after they saw how great it truly was going to be. So what. We just said the other day to a friend, “Controversy aside, that building is probably one of the best places to live in all of New York City. If I had millions to spare, we’d buy there…” And we would. Just let it go already. You are only causing yourself heartache.

  • Brooklyn Heights Guy

    Mr. Gutman should not only resign from the BBP board, but he should also be forcibly removed from any other similar board (e.g. Brooklyn Public Library) on which he sits for his obvious contempt for fairness, transparency and the ideals of public service.

  • Brooklyn Heights Guy

    So we should just give up without a fight? If we don’t stand up and cry foul at some point then we can only blame ourselves when this nonsense repeats itself with the next project.

  • Concerned

    The community involvement here is awesome. It is true democracy at work. It doesn’t matter if you are for or against this cause, for you to tell people to quiet down on an issue important to them is contra everything this great country was built upon. Shame on you.

  • HereToStay

    Oh Lord.

  • Concerned

    Nice response. I grew up in a place where everyone talks about community, but it’s really everyone for themselves. Coming to Brooklyn Heights many years ago, what I found is that there is much more community here than anywhere else I have lived. People care. People argue. Like minded people come together and sometimes make a difference. Do you really pooh-pooh that idea? If so, I feel sorry for you. It’s the arguments that you don’t like that really matter.

  • Andrew Porter

    They adhered to the letter of the law, but their actions are less than ethical, IMHO.

  • HereToStay

    There is nothing to fight – that is what you don’t understand. We had a dumping ground and now there is a great park and a hotel and condo. It’s not the end of the world. 99.999% of New Yorkers don’t care that the view of the bridge is blocked in one tiny corner of the world… And yes, developers make money, some politicos are corrupt… SO what? There is nothing to get so upset about. This is not about community spirit. It’s about a few people with axes to grind. This used to be a fun blog to come to and now it is only complaints about people with too much money and power or how the system is messing with one group of residents or another. Haven’t you noticed that almost every commenter has left? Do you not see why?

  • R.O.Shipman

    Did you miss the part where they recused themselves? They took themselves out of those questions after they bought. Again, I don’t see the problem.

  • R.O.Shipman

    Those weren’t my words, those were the words uses in the post I replied to. I cited them for being illogical.

    I’m choosing to believe that a public board acts in an upstanding manner and recusal really means recusal. That’s no more ridiculous than assuming that everyone involved with any public organization is hopelessly corrupt.

  • DIBS

    Hear, hear. Exactly

  • Pierrepont

    As a firm believer in karma, I hope that climate change puts paid to that building before they’ve even completed it.

  • gc

    I’ve got a bridge to sell you R.O.
    You just may not be able to see it anymore.

  • gc

    People would feel the same way about buying an apartment inside Central Park. The only difference is that up until now you couldn’t. Shame on us for allowing this to happen!

  • Willow Street Watch

    That’s not true, if you count there are as many new commenters as have left.

    And the central POINT of the Heights has ALAWAYS been that the Heights residents average cultural, intelligence (and societal value) level is ABOVE 99.999% of the average NYC resident (especially these days)

  • Willow Street Watch

    Well, your “karma” is ONLY going to happen if you find something they are doing which is a serious violation of law either on this project…OR..in relation to some other venture they are up to and present it to the NYS AG or better, a U.S. Attorney! Then the nonsense stops.

  • Jorale-man

    It matters because the board members entrusted with oversight have a conflict of interest in a project that has been riddled with conflicts and corrupt deals.

    But to another point here: I’d argue these would be bad places to live. In your front yard, you have thousands of people on weekends streaming past your windows, getting in fights on the basketball courts, etc. In your backyard, you have the noisy, polluting BQE. And many of your neighbors would resent you being there because your building has marred views that have existed for decades.

  • Andrew Porter

    I keep reading posts about the piers being a dumping ground, and they’re totally wrong. In fact, the Port Authority had their annual “Brooklyn Works!” exhibits in Pier One, and the Strober Bros. Building Supplies rented another of the piers. By tearing down, belittling other commenters and lying about what the BBP has replaced, doesn’t make your statements any more forceful. They just undermine your argument.

  • judifrancis

    Why this is wrong is because Hank and David and the other person who is not named but she also purchased apartments in park housing, are the authors of housing inside this park in the first place. Do not forget that there were sufficient funds to pay for the park without any housing whatsoever. The fact that these people voted for 10 years for park housing and feathered their own nests with out of scale and inappropriate housing is bad enough. But the fact that no more housing is EVER needed even if one were to accept the housing plan because they have too much money flowing from these already developed condos. Yet these board members are STILL advocating for housing (on Pier 6). This should be enough to stop this whole mess right in its tracks and force Toll Brothers to take the height off the Pierhouses now.

  • NeighboorHood

    I agree completely. I also think the “other person” should be outed. Why not name her?
    I’ve heard Dame Whitty’s son bought in 1 BBP and I noticed that her house on Columbia Terrace is undergoing a full reno. Wondering if she sold/is selling that brownstone?

  • BrooklynBeBop

    How do you know they recused themselves? Because they said so? Please. I’ve seen some of the minutes. They are quite brief with monimal information I imagine so that all the board.members could cover their behinds from all the shenanigans.

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