NYC Puts Brooklyn Cemetery Up for Sale to Only Nonprofit Buyers

The New York Times reports that the Canarsie Cemeterey, consisting of 13 acres, 4.5 of them undeveloped, is for sale in Brooklyn.  However, this has not been an easy sale as New York City has been trying to sell it for more than 25 years and is trying again this year.  The city’s Department of Citywide Administrative Services (Department) issued a request for bids earlier this week, and officials say they hope it will be more fruitful than the last round, which took place in the mid-1990s during the Giuliani administration.

There are about 6,000 cemeteries across New York State, and it is very infrequent to see one changing ownership, especially for money.   New York City never intended to get into the cemetery business.  The Canarsie Cemetery, at the corner of Remsen Avenue and Avenue K, was originally owned by the town of Flatlands, which then became part of Brooklyn. When the five boroughs merged in 1898, the ownership passed to New York City, which has handed it off to a veritable alphabet soup of agencies, some of which are defunct.  While the city oversees dozens of cemeteries, some of them very small, Canarsie is the only that is still operational with open plots. Tending to graves is outside the normal realm of the Department’s expertise — it manages office buildings, courthouses, and surplus goods — so it has outsourced the maintenance of Canarsie.

In other states, there might be more interest in the purchase of Canarsie Cemetery, because, as one regulator put it, “There is a lot of money in death.” Cemeteries are sold for the normal reasons that any small business might be handed off: retirement, relocation, or if the next generation decides it does not want to continue in the family business.  Unfortunately for the city, New York State is one of a handful states that require a cemetery to be run as a nonprofit business.  So under New York State law, the bidders for Canarsie Cemetery must meet certain criteria: (1) they must be nonprofit; (2) they must already be in the business of cemeteries; and (3) they must already be operating in New York State.  The city has reached out to about 40 organizations that fit its criteria. The hope is that some other cemeteries that are filling up may look to Canarsie to provide them with extra land and prolong their life cycles. As such, the city is giving an open house tour of the cemetery on June 3rd.

Cemeteries are a unique industry. As one might say, there is a natural life cycle to the operation of a cemetery. Unlike many real estate properties, the tenants here do not generally move in and out. As a business, cemeteries earn money from the sale of grave sites, interment fees, and investment income. But as they fill, income from the sale of grave sites and interments declines, but the cost of maintenance persists.

In addition to New York, the other states that require cemeteries to be run as nonprofits are Connecticut, Massachusetts, Maine, New Jersey, and Wyoming.  Some believe there is less chance for abuse if cemeteries do not have a profit motive.  Canarsie Cemetery does have the traditional real estate dictums working in its favor: land (they are not making any more of it) and location (New York City is, even during the recession, one of the most expensive real estate markets in the world).  Canarsie Cemetery is currently filled with 6500 graves and has room enough for about 4,000 additional graves.

SS