Perks for Profs

For LB and Bob — from today’s ABA Journal Weekly Newsletter. Note that Prof. Sharkey specializes in empirical legal studies.

NYU Law Pays $4.2M for New Prof’s Condo

Posted Jan 23, 2008, 09:07 am CST
By Debra Cassens Weiss

New York University law school apparently helped lure professor Catherine Sharkey from Columbia University with the purchase of a multimillion-dollar, 4,000-square-foot condo for her in a complex overlooking Central Park.

A foundation associated with NYU paid $4.2 million for an 80 percent interest in the condo at 455 Central Park West, the New York Times reports. Sharkey and her partner bought the remaining 20 percent interest for $1.05 million with the help of a mortgage from the foundation, according to property records examined by the Times.

Sharkey is an expert in product liability law and empirical legal studies. NYU announced last June that it had recruited her .

NYU also owns a $3.5 million condo in Greenwich Village and a $2.35 million condo in Brooklyn. NYU spokesman John Beckman said it usually charges rent to faculty members who use the foundation’s apartments. “New York is attractive to some of the best scholars in the world, but we have to deal with the New York real estate market,” he told the Times.

A hat tip to TaxProf Blog, which posted the story.

Editor’s note:  Welcome Jeffaregularworkinglawyer!!  First blog of many to come, we hope.

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8 Responses to Perks for Profs

  1. laurabethnielsen says:

    I have a friend who shall remain nameless who was recruited by NYU — the housing subsidies were ridiculous. and then, since you are in New York, you require private schooling for your kids and they were going to subsidize that too. Here is the interesting thing — she went somewhere else that offered her more.

    PS — Bob, ABFers are going to need some serious equalizing!

  2. robertlnelson says:

    So, who holds title in the property? Is NYU investing in intellectual capital or real estate, or both? What is the monthly payment on $1M mortgage? I must admit, I have to read this woman’s work. It must be really good. Hey, LB, how about some links?

  3. jeffaregularworkinglawyer says:

    My first thought about this was, Hey great. A law professor living in a $5 million, 4,000 square foot apartment overlooking Central Park. Why should Wall Street types and celebrity entertainers have all the fun? NYU may not pay Prof. Sharkey what a partner at a big NYC firm makes (if it did, she could buy the place herself), but she’ll be housed like one.

    My next thought was, this is the ultimate golden handcuff. NYU owns an 80% interest, she owns 20%, and she got a $650K 30 year mortgage from NYU (no idea if at market rates or below) to help her pay her $1.05M share. What do you think happens if she leaves NYU? She’ll be looking for new digs, I bet. And what’s the real cost to NYU? The $4.2M it invested will probably do as well (or poorly) in the NYC upper level condo market as in the stock market — its only real cost would be if it subsidized the rate of the mortgage it gave Prof. Sharkey.

    My third thought is, this can’t be a good thing for the legal profession. Here I’m on shakier ground, but this raises the usual issues about what the goals of a law school should be. Will having Prof. Sharkey on its faculty help NYU turn out better lawyers? Will its graduates be more knowledgeable and skillful? Smarter? More committed to justice and the rule of law? And if so, will Columbia’s students be educationally impoverished to the same degree that NYU’s benefit? Moving a professor from one school to another doesn’t seem to create any new value, unless there is a significant difference in the quality of the students she teaches or the faculty she interacts with, which there isn’t here. Recruiting Prof. Sharkey might help NYU’s U.S. News ranking, but whatever the cost to NYU, I wonder if those resources could have been used more productively.

  4. jeffaregularworkinglawyer says:

    Stupid me — This is why I’m not an economist. NYU also has opportunity costs — presumably, Prof. Sharkey isn’t paying rent for the 80% she doesn’t own.

  5. laurabethnielsen says:

    here you go — and it is about unintended consequences of damage caps on medmal:

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=668023

  6. laurabethnielsen says:

    also, this is a golden handcuff situation — I have been offered a job at an institution where they would help/let me buy a house, but the university owned the land underneath it. This was both the mechanism by which you could afford this house in a state that you associate with a serious real estate boom (but warmer than NY) but would also be the mechanism preventing me from enjoying the equity that could accrue.

  7. geoff2o0o says:

    Thanks, Jeff, for passing this along. What, in the alternative, would be the government entanglement problems if this were a public university? Could a state-funded institution similarly decide to make this type of investment in the interest of courting renowned professors?

  8. vickywoeste says:

    Does anyone see conflict of interest potential here: she also works on product liability issues. What if NYU owns a patent in a gene or a medical product or medicine that she exposes as a mass tort? Is she going to pull her punches because of this sweet deal? How would we as scholars feel about those kinds of hypothetical situations, and how do we anticipate what we’re going to do *if* they should arise?

    And, yes, Bob, serious equalization is due. Lake Point Tower condo, anyone??

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