Is 740 Park blighted?

It's easy to see who's winning the popularity contest in New York real estate circles these days. Co-ops, like many a high school queen bee, are granted grudging respect: good looking, better grades, they hang out with all the best people and wield an awesome amount of social power. But condos, well, condos seem to have it all: they're beautiful, friends with all the cool foreign kids and they're so nice while still playing the edgy bad boy.

Over the past year or so, belligerently wealthy out-of-towners have been snapping up New York condos like so many Jimmy Choos and boarding school seats. The Russians have invaded and we couldn't be happier, and the rest of the world is eager to follow. Glassy condo towers are—after their brief recessionary hiatus—rising again. Indeed, the biggest residential deals of the year went down neither at co-ops nor mansions but at 15 Central Park West and newfound rivals One57 and the Ritz Carlton. Amazingly the Ritz may look like an old co-op but it is actually a 2002 condo conversion of the old St. Moritz hotel. Back then, units sold for a fraction of what they are now getting, and certainly less than its co-op rivals on Park and Fifth avenues.

The same, alas, cannot be said of co-ops. Marvelous as those bastions of old money are, they are also notorious for their rigid policies and grueling board interviews, where one's future neighbors—if one is so lucky—pour over financial documents and probe into personal lives. Look no further than the case of godly 740 Park. While the famed building notched a co-op record this year with the $52 million sale of Courtney Sale Ross' immense spread, that is half the price of some of the record deals now taking place. Meanwhile Goldman guy Jonathan Sobel sold a penthouse at the Verona (a very nice one, but still, ever heard of the place?) for more than he paid for a new duplex at 740 Park. He got a 45 percent discount, to boot, from what the home was first asking four years ago.

Oh, how the mighty have fallen. But might they rise again by becoming condos?

"It has been done and it is possible," said attorney Jeffrey Reich, whose firm Wolf Haldenstein Adler Freeman & Herz is counsel to co-op and condo boards around the city. However, when asked if the surging condo market had inspired a rush of interest in such conversions, the answer was a firm no.

It is possible, yes, but it is not easy—financial complications, considerable costs and terrifying taxes all stand in the way—and honestly, any board member who has battled for months, even years, over some silly bit of building minutiae knows they shouldn't even fantasize about this kind of thing.

"Frankly most co-ops don't want to convert," Mr. Reichel said. "There was a lot of interest in conversions 10 years ago, but during the downturn people really grew to appreciate co-ops."

Basically, Mr. Reich said, the co-op would first of all need to pay off its underlying mortgage and individual owners would need to trade in their share loans for mortgages. The conversion could not be completed, in other words, while the building held any debt, a situation that precludes a large number of condo conversions unless shareholders are willing to pony up the cash to pay off the building's mortgage and make the switch happen.

Moreover, the IRS views such conversions as a taxable event, meaning that essentially, property owners would be seen as having sold their co-ops for market value and purchased new condo units, a huge tax liability, especially for owners who purchased their units a long time ago and have seen their values shoot up. A $250,000 co-op purchased in the 1970s could easily be worth $5 million now. Which is fabulous if an owner decides to sell, but less fabulous if the owner stays put and must, essentially, pay for the income earned on trading in his or her shares. And since stratospheric prices tend to exist only on the highest end, the odds of a payoff seem slim. Plus, additional tax complications abound for the building and commercial units not under certain tax loopholes protecting primary residences.

There are some tax protections that apply to principal residences—owners can exclude the first $250,000 of gains and married couples $500,000—but let's be honest, that's not worth a whole lot in today's market.

To add to the headache, the co-op might even need an architect to prepare a new set of plans for the building and certify them “as built.”

Freedom, as the old saw goes, comes at a cost.

"I've heard buildings talk about it, especially as condo sales have outpaced co-op sales in several neighborhoods," said Gil Neary, founder of DG Neary Realty. "But really, you're changing a lot of money to change your identity and really what you could do without too much trouble is just to change the rules, which is what most people object to."

Nor are conversions entirely agreeable to the set that lives in co-ops in the first place. Many New Yorkers who chose to call co-ops home actually like the advantages of the cooperative lifestyle—sharing a building and its many inevitable headaches with a carefully vetted pool of like-minded people. It adds financial security, the thinking goes, because residents get to interrogate their neighbors. Many housing experts point to this as a big part of the reason the city's housing market has been less buffeted by the housing bubble. It may be a historical quirk that the city is filled with co-ops (they still outnumber condos 3 to 1) but some people do like them. And a co-op can always rewrite its bylaws, transforming into that glorious beast, the cond-op, built like a co-op but with condo rules, should cooperators want to stop looking down their noses at any would-be residents.

There is also the vote. In order to convert, a supermajority of shareholders must vote in favor of the change—bylaws often set that number between 66 and 80 percent. Not only would that many New Yorkers never agree on anything, but imagine the nasty stares in the halls from the small minority who didn't want the conversion. For anyone who has attended board meetings where picking lamps for the lobby is an impossibility, the difficulty of convincing residents should be apparent.

Still, while one shouldn't expect to see 740 Park or 820 Fifth abandoning their shareholder system anytime soon—Howard Marks might have kept his stunning apartment at the Ritz Carlton, but he traded the place for a spread in the oldline co-op just like Mr. Sobel—there are a few New York buildings that have successfully made the transition. A co-op in Bensonhurst, Brooklyn, and another in Rego Park, Queens, have switched and are, reportedly, happy with the results. They were tired of paying the massive maintenance that seemed to be distressing possible buyers.

Others seem reluctant to jump on board—make that off board. In the end, the easiest solution for condo lovers in co-ops is simply to sell and buy a condo. The condo board won't judge.

kvelsey@observer.com

Best to start saving, just in case. (Tax Credits, flickr)

Time. We really have so little of it. Just a few years ago it seemed like condo and co-op owners had all the time in the world with their beloved tax abatement and now it's expiring.

There are plenty of abatements out there, of course—ones for new construction and capital improvements, senior citizens and veterans, but this one is special. This is the one that gives a generous 17.5 percent property tax reduction to just about all co-op and condo owners. And it's going to die on June 30 if an extension doesn't come along to save it.

The situation has looked bad before, of course. The abatement, first passed in 1996 to help offset the disparity between the tax rates of co-op and condos versus one- to three-family houses, has required several renewals. Still, have things ever been this dire?

"I don't think that it's ever been this down to the wire," said Eva Talel, an attorney at Strook & Strook & Lavan who specializes in real estate law.

It's been a pretty sweet abatement. Owners can get the abatement on up to three apartments in the same building and none of them have to be a primary residence. There's also no cap on the assessed value of a property.

Several bills are pending in the state legislature to extend the abatement, so not all hope is lost, and two of them would extend the current policies through 2016. The third, sponsored by the city, would only extend the current policy for one year before instituting a much less generous one.

The tax abatement costs the city hundreds of millions of dollars in lost revenue. Maybe the city's being greedy here, as the Real Estate Board of New York loves to point out, real estate taxes are the largest single source of revenue for the city. But the cash cow could be producing a lot more milk.

Under the city's new guidelines, the unit receiving the abatement would have to be a primary residence, ruling out investor properties and pied-a-terres. It would also restrict the benefits to the first $100,00 in assessed value, according to Ms. Talel, which makes a pretty huge difference in tax savings for most New York apartments.

"The impact would be felt the most in Manhattan," Ms. Talel said. "The assessed valuation for buildings are getting higher and higher. The combination of that and capping the benefit at $100,00 per unit will have a very serious impact and result in a big tax increase for co-ops and condos."

Ms. Talel said there is confidence in the real estate community that at least one of the bills will pass before the new fiscal year starts July 1. Will the wait cool New Yorkers' recent ardor for buying rather than renting? Probably not. When it comes to real estate in New York, the choices are basically expensive and more expensive.

Still, even an extension does pass, the real problem remains: the tax code is unfair, and while the abatement may address disparities between two categories of property owners, the people who are left to bear the brunt of the city's real estate tax bills don't own property at all—they're renters.

Multi-unit apartment buildings pay the high rate without the benefit of abatements, a cost that is passed on to renters, according to a report NYU's Furman Center for Real Estate and Urban Policy that was released this spring.

The tax code "effectively requires renters to subsidize owners, even though the demographic and socioeconomic characteristics of the two groups suggest that renters already are having a harder time meeting their housing costs," according to the report.

Ok. We admit that rewriting the tax code sounds miserable. But wouldn't it be better than abatements and special programs and incentives and favors to different constituencies? New York is a city of renters, many of whom live in multi-unit buildings, so why keep tax codes that privilege owners of single-family homes?

kvelsey@observer.com

That is what he and wife Marcie paid for a 14-room duplex at stately limestone beauty 998 Fifth Avenue, according to city records. Proving his real estate chops, Mr. Pantzer got a deal on the place, which came on the market way back in September 2007 for $25 million. The price finally came down in April of last year to $19 million, though that was still too much.

Listing photos for the third-and-forth-floor home show a sumptuous spread with paintings hanging from every wall—not surprising given this was the former home of gallerist Nathan Bernstein and documentary filmmaker Katharina Otto. His name was not listed on the deed, which was processed by a law firm in Chicago.

The couple bought the home in 2000, The Observer reported at the time, for the same price they just sold it for—rare for such a pedigreed building (it was designed by McKim, Meade and White, of Penn Station fame) though other units have also languished of late. An 18-room spread on the fifth floor, belong to former Morgan Stanley vice-chair Bruce D. Fiedorek, quietly came on the market in 2009 (an inauspicious time) for $45 million, and now wants $34 million. The fifth and sixth floor duplex directly above the Pantzer's new home came on the market a year later for $23 million and went through three price cuts to $20 million last July. It was bought in 2006 by Constance Millstein.

Part of the problem could be what we called "the slowest co-op board in Manhattan" back in 2000, when another set of buyers actually walked away, paving the way for the Bernstein-Ottos to buy. Essentially every tenant in the building has to be present to vote on a new neighbor.

The Pantzer's new place was built for the Guggenheims, according to a listing from Brown Harris Stephens Kathy Sloane, who had the co-exclusive with Corcoran's Sharon Baum. "While not the first apartment house on Upper Fifth Avenue, 998 was the first true luxury building and much the grandest when it was built," Ms. Baum coos in her listing. "Constructed as a series of mansions stacked on each other, the 12 story building’s elegance and efficiency made apartment living highly desirable."

Among the remarkable features is a marble staircase connecting the two floors. Ms. Pantzer should have no problem decorating the home, as she used to work at Town & Country magazine. The couple used to live in an eight-room home at 565 Park Avenue, according to city records, which they bought for $2.7 million in 2005. Quite the upgrade.

 mchaban [at] observer.com | @MC_NYC

Terrace topped 101 CPW. (Flickr)

(Streeteasy)

The Wall Street Journal once said of Jeffrey Aronson's Centerbridge Partners that its investment strategy"might well be termed one of extreme restraint." The same cannot be said for his new Manhattan home, a massive co-op overlooking Central Park.

Mr. Aronson is known for his skill in investing in distressed assets, and he has frequently plays a waiting game, rather than get caught up in a bidding war or a bad investment. Too bad he did not pounce on this ninth-floor co-op at 101 Central Park West when it came on the market for two weeks in April of 2009. At the time it was asking $11.5 million, but Mr. Aronson and his wife Shari wound up paying $13.075 million instead, according to city records.

A red-brick beauty. (CityRealty)

"It's a big difference, the timing," said Brown Harris Stevens broker Karesse Grenier, who handled the unlisted sale for owners Michael and Helen Levy. "The market's recovered, I'd definitely say that."

The classic nine features views over the park from all three bedrooms as well as from the living room. "Distinguished prewar details include herring bone floors, hi ceilings and a wood burning fireplace!"  boasts the 2009. "The layout is ideal for the privacy of family living and entertaining." Many of the main spaces are located off a central gallery, giving the home that true prewar feel.

"It's the perfect view and it has a terrace, which is a real bonus" Ms. Grenier told The Observer, explaining the appeal of the home to the buyers. "It's in one of the greatest building on Central Park. That's something people are really attracted to."

Other notable New Yorkers attracted to the building are Georgina Bloomberg, Yeshiva president Norman Lamm, and perhaps the ultimate seal of approval, that god of Central Park West, Robert A.M. Stern, though he no longer residers there.. The co-op was built in 1929, designed by Simon Schwartz and Arthur Gross, across the street from the Majestic, and past residents have also included Harrison Ford and Rick Moranis.

If the Aronson's had to pay up for their new home—they currently live in Harrison, N.Y.—the Levys made a great investment, having bought the home for a a little less than $6 million about a dozen years ago, according to Ms. Grenier. The kids have moved out, the market is good, and so the semi-retired couple is downsizing, having relocated to 37 Riverside Drive according to the deed. Trading park views for river ones.

Correction: A previous version of this article said that the living room was located on the corner of the building and that Robert A.M. Stern was still a resident of the co-op. The Observer regrets the errors.

mchaban [at] observer.com | @MC_NYC

Owen Laster

Named by The New York Times as "one of the most powerful literary agents of his generation," Owen Laster was an old-guard bookworm who spent his entire career at William Morris. Having worked with such literary luminaries as James A. Michener and Gore Vidal, Laster was a fixture in the book world for decades until he retired in 2006. Not surprisingly, the New Jersey native lived in a book-crammed co-op on Sutton Place, which his estate just sold.

The tome-heavy home at 425 East 58th Street spans 1,800 square feet and was recently renovated, according to a listing from Corcoran agent Rose Marie Laster (no apparent relation). Ms. Laster gushes about the two-bedroom space in the listing, which offers "stunning south vistas of the East River and the panoply of New York skyscrapers."

As the head of William Morris' global literary division, Laster was doubtless flooded with galleys and advance copies of books from aspiring best-sellers. To accommodate, he had bookshelves installed along the walls of the living room and the master bedroom. As the agent responsible for Margaret Mitchell's estate, we wouldn't be surprised if an early edition of Gone With The Wind was hidden among the myriad titles. He also represented Judy Bloom, so perhaps a copy of Are You There God? It's Me Margaret graces the shelve as well.

The home was originally put on the market last May with an asking price of $2.875 million. The buyers, Jay Finkel and David Panicek (both doctors) ultimately paid just $1.8 million for the two-bedroom, 2.5-bath pad. It looks like the late literary agent's real estate agent was not quite as good at selling homes as he was books.

eknutsen@observer.com

He'll take it! (Newsday

"Responsible capitalist" and one-time presidential candidate Dal LaMagna may have an impressive resume, but he will always be known to the world as Tweezerman. The Queens native invented the world's most beloved tweezer brand after finding his derriere full of splinters after a tanning session in the buff back in the '70s.

Messiah to unibrow sufferers the world over, Mr. LaMagna has now poured his efforts into another venture, sustainable countertops made from recycled glass. His outfit is appropriately based in the Brooklyn Navy Yards, and it seems the entrepreneur decided he needed a home-base back in his hometown, somewhere to install some fancy counter tops: Mr. LaMagna has purchased two units at 441 Central Park West.

While he could have afforded much grander residences with the $30 million he earned selling Tweezerman a few years back, Mr. LaMagna chose a humble duplex for which he paid just $1.3 million.

According to the listing broker, Jeana Maruggi of CitySites, the two-bedroom, two-bath place features a terrace off the master suite, a washer dryer and a wood burning fireplace. We expect the master bath has a vanity suitable for the tweezer king.

This appears to be Mr. LaMagna's first home in the five boroughs in awhile: on the deed, he lists a five-bedroom home in the suburbs of Seattle as his current address. Meanwhile, The Washington Post notes that Mr. LaMagna also has a $2.1 million house in our nation's capital, which he purchased in 2007 to host anti-war Iraqi dissidents. Maybe he can put up some Occupy protesters in his new home,

The home, which has been on the market since last June, was sold by Penny Davis, who lists a Miami address on the deed.

eknutsen@observer.com

The Sherry Netherland at 781 Fifth Avenue

Roy F. Zurkowski was one of the lucky few in the world who was able to make millions off precisely what made him most happy: fitness. In the '80s, Mr. Zurkowski became one of the original iron-pumping kingpins, cashing in on the wave of Regan-era health consciousness sweeping the nation. By 1983 all his clubs were purchased by Bally Manufacturing Corp, thus beginning the Bally empire.

Mr. Zurkowski passed away in November 2010, leaving behind a gym-sized home at the Sherry Netherland. That co-op has just sold for $7.1 million, city records show.

We called Mr. Zurkowski's Michigan-based lawyer, Donald Pierce, to learn more about the apartment. Could he possibly share some details? "Not having seen a lot of multi-million-dollar New York apartments, I don’t know what might distinguish this one form the others," he said. While at first thinking Mr. Pierce was waxing Midwest naivete, it turns out the co-op is pretty standard Fifth Avenue fare.

The listing brokers, Meredyth Smith and Serena Boardman of Sotheby's do little to differentiate the two-bedroom, four-bath space from similar up-market uptown homes. "A private elevator landing leads into a gracious Foyer flanked by a wood paneled Library and Bath with views of the Park and a magnificent corner Living Room with fireplace." In short, the basic trappings of every seven-figure Lennox Hill pad.

Accompanying photos and a floorplan show a checkered marble floor in the foyer, a dressing room in the master suite, and walk-in closets scattered throughout the space. We asked Mr. Pierce if Zurkoswki had outfitted his apartment with prized fitness equipment. "No, it was very typical, like all the other ones in the multimillion dollar category," he said, sounding as jaded as an haute-living local.

The property was purchased anonymously through Seagull's Path LLC.

eknutsen@observer.com

While the apartment might not fit Dorothy, Rose and Sophia, the three-bedroom, two-bath place at 430 East 56th Street was not wanting for space. In addition to the 2,000 square feet of inside, the ground-floor home also features a 2,000 square-foot garden, "a a bucolic oasis in the heart of Sutton Place," according to listing brokers Matthew George and Michael Moran of Douglas Elliman. Mr. Moran told The Observer that McClanahan had in fact combined two apartments in the building, where she had lived for the last decade of her life.

McClanahan added her own bit of theatrics to the apartment, building a secret passageway disguised as a spice-rack that, floorplans show, leads to a bathroom. Hey, when you've got to go... She also added a library off the master bedroom (perfect for storing her six wedding albums) and Brazillian hardwood floors, the listing states.

Additionally, the home features (a lucky) 13 closets, including one very special one. "One of the kitchens was turned into a closet," Mr. Moran said.  "And it was fun because Rue had always kept all of her clothes that she had worn on the Golden Girls." We imagine racks upon racks of Blanche's shoulder-padded blazers, pastel blouses and polyester pants.

The home, originally listed just after McClanahan passed away in the summer of 2010, was initially priced at $2.5 million. The buyer, investor and clean-energy guru Alan Salzman, ended up paying just $1.75 million for the place. We called Mr. Salzman's office in California and, upon getting his assistant on the line, explained that we'd merely like to ask the venture capitalist if he watched the "Golden Girls."

"No, he cannot speak about that," she said, tersely.

eknutsen@observer.com

While the apartment cannot be compared to the Frick's primary homestead, it is a substantial home nonetheless. The two-bedroom, two-bath penthouse sits atop 1112 Park Avenue, a pre-war co-op at the corner of 90th Street—making it just two blocks from The Guggenheim, it so happens.

Listing agents Sharon Baum and David Enloe, both of Corcoran, boast of the apartment's covetous components. Chief among them is an emense 1,5200 square-foot wrap-around terrace with outside sitting space and wide city views. It looks almost as big as the Frick's own grounds.

The home also boasts a private elevator landing, a wood burning fireplace in the living room, a solarium, and a library, all details which "epitomizes the glamour and drama associated with a Manhattan penthouse," according to Ms. Baum and Mr. Enloe's listing.

Representatives of the Frick did not return numerous calls for comment.

The home was purchased by Jonathan and Candace Wainwright, who paid $5.9 million, according to city records. Mr. Wainwright is a senior partner at Cadwalder and his son happens to be the founder of Cosi, the office worker-clogged sandwich shops. Life is delicious indeed.

eknutsen@observer.com

Victoria and Jon Patricof

While his father, Alan Patricof, may be one of the world's most renowned investors, Jon Patricof chose a different professional path from the patrician patriarch. As the COO of Tribeca Films, the younger Mr. Patricof spends his days crunching cinematic figures and yucking it up with Robert De Niro.

Still, he has managed not to stray too terribly far from his ilk. Mr. Patricof and his wife, Victoria, have just purchased a seven-figure apartment at 755 Park Avenue, just four block from his mother and father's longtime New York digs. Perhaps they could not find a Tribeca loft to their liking.

Jon and Victoria Patricof spent $6 million on the four-bedroom, 4.5-bath spread, city records show, and by the looks of it, they will be living richly in their new place. A listing from Brown Harris Stevens agent Guida De Carvalhosa explains that the 9th floor pad has a private elevator landing, a wood burning fireplace and a library. The kitchen, naturally, includes a butler's pantry, and the master suite features a jacuzzi. The three additional bedrooms are perfect for the Patricofs' two children, Jon Jr. and Chloe, and grandpa if he wants to sleep over or needs a four-block change of scenery.

The home was purchased from businessman Peter Gordon and his wife, Lucia Hwong Gordon. Ms. Gordon is equally celebrated for her tireless (often fur-clad) social appearances and her classical music scores. The couple had bought the apartment just last year for $5.8 million, and list 655 Park Avenue as their current address on the property deed.

eknutsen@observer.com