It was a busy summer for the officers and staff involved with overseeing and guiding the constantly shifting ground under our building project.

For background, in late 2022, the administration realized that maintaining all the systems in our 322 West 48th Street building was becoming more challenging, more expensive and more time-consuming. All our systems (HVAC, plumbing, and electrical) were at end-of-life and failing. Additionally, we learned that Local Law 97 was coming into force at the beginning of 2024 and that, under its mandated carbon footprint limits, we would be subject to substantial annual fines beginning in 2029. Thus, we entered upon a huge renovation and green tech conversion of the building.

We encountered numerous hurdles and isolated events of terrible luck over the past two years including the loss — and deaths — of key team leaders, broken promises, a NYC commercial real estate market in freefall, exploding budgets, delayed timelines and more.

The project is currently shut down. The building is gutted, although new framing is approximately 85 percent complete. But nothing has been done there since Dec. 1, 2024.

We’ve been forced to acknowledge something serious. Given the low current value of the building, the annual costs of ownership and the unreliable cash flow of any union, we no longer can afford to finish the project. No bank will underwrite a multi-million dollar loan to us, and even if one did, we could not afford the annual debt service (on top of the carrying costs of owning the building) for more than a couple of years before we faced insolvency .

This is not the report we envisioned writing when we began the project and all the pieces were coming together well. We had a team we thought we could trust, designs we loved and financing in place.

So, we are now looking at the options left to us, and there are several.

Our most hopeful option is that the AFM will offer us a much needed helping hand. They are considering whether they can buy the building, finish the renovation, move their offices to the 4th, 5th and 6th floors and rent the rest of the building back to us. This is what’s called a sale/leaseback. We expect to get word whether they can manage such a scenario by mid-September, after the International Executive Board meets to discuss. This would entail an enormous sacrifice for the AFM as they are committed to their current Times Square office space until 2029.

But we have been looking at other options. A straight sale of the building could net 802 between $4 and $9 million, depending on who buys it. We are told we will net the greatest return if we sell to a residential rental unit developer and move ourselves permanently into rental space elsewhere. We would get a much lower return if we sold to a user who would keep the building as office space and lease our space back to us.

We are also exploring a ground-lease option. In this, we keep the land and sell the structure. This would get us a few million up front only, but would provide $300,000 to $400,000 in annual income for 50 to 100 years.

Local 802 has been hosting hybrid informational meetings each month to answer members questions about the building and what might happen. We have invited members to offer their own ideas about the best way forward. Based on feedback, we are now looking at the possibility of selling the building for top dollar and investing the proceeds in a condo office space. This would remove the downsides of renting and allow 802 to continue as the owner of its space.

Whichever option we choose, we are committed to recreating the Club Room in some form wherever we land.

A decision whether to sell the building will be made in the next couple of months. If selling is the way we must go, it will require a vote of the whole membership by snail mail. This will be discussed at the October 22 membership meeting.

The next hybrid informational meeting is scheduled for September 18 at 4pm (click now to register).

The building belongs to the members. It is you who will ultimately have to make the decision.

Want more details? We’ve got them — including a detailed history of the project and all the numbers. We’ve posted them at Local 802’s membership portal. Log in at https://info.local802afm.org then look for MEMBER DOCS.

Sara Cutler was the previous president and executive director of Local 802 and now serves on the Local 802 Executive Board. Click here to register for the next building update meeting.