Original Real Estate Stories This Week from Observer.com: 7.10.09

For the last half-century, Doris Diether has been a kind, but constant, thorn in the side of landlords and developers–ever since she joined Save the Village as chair of the tenants committee in 1959, agitating alongside such luminaries as Ruth Wittenberg and Jane Jacobs. She was appointed to Community Board 2 in 1964—“to keep me quiet,” she suspects—and she remains Manhattan’s longest-serving community board member.

Over a noon breakfast at the Waverly Restaurant in late June, Ms. Diether picked through a packet of her own press clippings. She drained three cups of coffee, and she laughed about five decades of fights—won and lost—against a litany of landlords (hers and others), countless community board members, and urban planners from Robert Moses to current City Planning Commissioner Amanda Burden, who Ms. Diether hopes will come around to her current crusade: downzoning the Bowery’s east side. (Ms. Diether has already drafted the zoning proposal and hopes to submit it to Ms. Burden this month.) More here.

The private developer of three buildings at the World Trade Center, Larry Silverstein, is taking a legal action to break an impasse over the rebuilding of the site destroyed in 2001. The move is a significant change in course, as it comes after the top elected officials in the city and state attempted, and failed, to broker a revised deal amid the economic crisis.

In a letter sent Monday to other stakeholders involved with the project, Mr. Silverstein claims the Port Authority, which owns the site, is in default on numerous aspects of its development agreement. The letter starts the formalized arbitration process, which will ultimately put the matter before a three-person panel to rule on the issue. More here.


When the domed duplex penthouse at 285 Central Park West came on the market 15 months ago, the asking price was $16.5 million. Less than three weeks later the tag was down to $14.5 million, according to the listings Web site StreetEasy, which became $12,999,000 in September, $11.7 million in October, and then $9.9 million in November.

Last week it fell to $7.25 million, less than half of the penthouse's original price. More here.

"The five Noel women have made a name for themselves by shoring up the virtues of a nearly extinct aristocracy," said a 2002 Vanity Fair piece on Fairfield Greenwich Group founder Walter Noel's pristine daughters. "They’re well educated and well married, and they’re raising a pack of well-behaved, multi-lingual children while keeping their string-bikini figures intact ... with not a divorce or scandale among them." The scene was a lawn party thrown for youngest sister Marisa, who was about to marry Matthew Brown.

Afterward, he became a managing director at Fairfield; last January the couple paid $13.5 million for the 20-foot-wide townhouse at 12 East 78th Street.

In May, they filed plans with the Department of Buildings to spend millions on a renovation, turning the house into what the family's architect described as a place with "appropriate Upper East Side character." But then the multibillion-dollar Fairfield Greenwich Group, the biggest feeder to Bernard Madoff's Ponzi scheme, was destroyed by the titanic scandal. In January, a family spokesperson denied that there were plans to sell the new townhouse; in April, that spokesperson conceded that the house was about to be listed; and, in May, the townhouse came on the market with two top brokerages.

A few weeks later, according to the listing, the house is in contract to sell. A source close to Ms. Noel Brown said the contract price is $9.75 million, which means that the couple will lose at least $3.75 million on the house, although a full renovation would have cost a lot as well. More here.


Give me some idea of when you see the market returning.

I gave you some idea. I said it’s not relevant.


It is relevant.

Everyone gives dates. I’m giving you something better. I’m saying it doesn’t matter. It doesn’t matter. It doesn’t matter. If I said six or 18 months, what’s the difference? It’s just knowing that in six or 18 months, it’s gonna happen. ... I wouldn’t get so focused, because who knows. Near-term, that’s the best I can give. It’s a year or two. It’s not three or five. More here.

The 32 condos available at legendary Upper West Side apartment house the Apthorp now start at $1,575,000—practically a steal!

Nora Ephron, the subject of an Ariel Levy profile in this week’s New Yorker and one of the building’s many famous former tenants, once reminisced over the magic of paying $1,500 per month for a rent-stabilized apartment at the Apthorp. The post-condo conversion prices may not be as big of a bargain, but they do represent a significant decline from recent figures. After all, back in March 2007, the Apthorp condos were asking as much as $3,000 a foot. More here.

The tone of a City Council hearing last week on Mayor Bloomberg’s major Coney Island redevelopment plans was music to Joe Sitt’s ears. The red-carpeted Council chambers in City Hall quickly became an interrogation room as successive Council Members took their turns bellowing aggressive questions and assertions at a trio of Bloomberg economic development officials

Why not rule out the use of eminent domain? Where is the needed government funding going to come from? Why designate a private landowner’s property as parkland? Doesn’t the city government have a bad track record redeveloping Coney Island? Why use city money to bus in supporters to testify in favor of the city’s plan?

It just so happens that each of these questions had been urged by Mr. Sitt, the private landowner who has bought up the better part of the central amusement area in the onetime entertainment hub and who is now vigorously fighting key elements of the Bloomberg plan.

“I was pleased,” Mr. Sitt said. “It was the first honest forum on the future of Coney Island that’s ever been held, where every side and every perspective had to be upfront and candid.”

A previously low-profile and relatively little-known landlord, Mr. Sitt now finds himself planted squarely in Mayor Bloomberg’s path to victory on one of his top economic development priorities--in an election year, no less. It's a standoff that is rapidly headed toward a final round in coming weeks (the City Council must deliver a thumbs up or down on the mayor's plan by early August). The city’s vision for the area imagines new rides, hotels and retail in the main amusement area, and a large swath of parkland that would be city-owned—land that Mr. Sitt now, in large part, controls. More here.



Back when the New York real estate market was still so barbarically lush, the children of barons lived well. The Turkish billionaire Husnu Ozyegin’s son bought a $6.2 million apartment on East 66th Street, which was smaller than the $7.25 million Soho duplex that Time Warner magnate Steve Ross’ youngest child got, which was smaller than the new $16.5 million townhouse for Pittsburgh billionaire Henry Hillman’s grandson, which was smaller than the $32 million and $33.6 million co-ops Hummer magnate Ira Rennert’s two daughters got last year.

But hedge fund deity Steven A. Cohen, who was No. 97 on this March’s Forbes billionaire list, has a child who will be living slightly less sumptuously. According to city records, a pseudonymous corporation paid $2.7 million for a 1,921-square-foot duplex loft at 99 Warren Street. The billionaire’s wife, Alexandra, signed the deed as the corporation’s vice president, but a source said the apartment is for a 20-something son. More here.


You know what they say about the best-laid schemes o’ mice and men? It turns out the benighted General Motors Corporation may keep its New York headquarters at the eponymous GM Building after all.

GM is in negotiations with Mort Zuckerman and Ed Linde’s Boston Properties to renew its lease at the GM Building at 767 Fifth Avenue, rather than follow through on its former plans to relocate its New York offices to more capacious digs at Boston Properties’ other midtown gem, the Citicorp Center (recently renamed 601 Lexington Avenue), according to two sources familiar with the talks.

GM’s current lease for 101,000 square feet at the white-marble tower, which it built in 1968 as its headquarters, expires on March 31, 2010. Its new lease, for 120,000 square feet at 601 Lex, began on June 1 and expires on May 31, 2019. More here.

Brooklyn leads the way in stalled construction sites in New York City, according to a recent Department of Buildings report from their newly created stalled-sites unit, with 18 in Williamsburg and Greenpoint alone. These sites are not only bad news for the economy: many are also rife with complaints and violations from the DOB about a failure to maintain basic housekeeping. The results: cracking sidewalks, defective construction fences, and 18 new unintended hangouts!

In case you want to find out where all the fun is happening, The Observer has you covered: More here.

Finger Building photo from Gowanus Lounge.


In a real estate war eerily reminiscent of the Burger King–McDonald's skirmishes (albeit one less soaked in abattoir blood), Staples has signed a 15-year, 3,000-square-foot lease just down the block from a FedEx store, according to landlord Craig Nassi. Coincidence? Unlikely. Winick Realty Group repped Mr. Nassi, owner of the former Credit Suisse office space at 315 Park Avenue South, at the corner of 24th Street. More here.

It’s been more than three years since the Hearst Corporation has been looking for a tenant to fill the 14,000-plus-square-foot ground floor of its now not-so-new Lord Norman Foster–designed tower at Eighth Avenue and 57th Street.

Sources attribute much of the delay to the Hearst Corporation’s style of decision-making. Any retailer must be approved not only by the firm’s head of real estate, but also by its president and CFO. And then there’s the fact that, for a while, Hearst apparently insisted on asking $400 a square foot for space that, despite its proximity to the Time Warner Center, exists in a retail hinterland. More here.

The F.D.I.C. on July 1 signed a 10-year lease for 100,000 square feet at the Empire State Building. The government corporation, headed by the recently Ryan Lizza–profiled Sheila Bair, plans to relocate about 250 employees in its regional and field offices at 20 Exchange Place downtown.

Downtown elected officials aren’t pleased. U.S. Representative Jerrold Nadler, in a July 7 statement: “What I can say is that the economic and symbolic effect of a major federal financial agency leaving the financial district in the midst of severe economic recession is extremely unfortunate. This is bad for the morale of the financial district and the financial industry as a whole.” More here.


“Sorry,” says Anne O’Neil, running across the street, clutching a sandwich, to unlock the door of her new shop, Tiburon. “I had to get lunch at Fort Defiance.”

Usually, the long-time Red Hook resident explains, she’ll pull a passing acquaintance off the street and ask them to grab food. But this weekend, that of the Fourth, a large party of Red Hook locals has traveled to one family’s country house in Vermont, where they are preparing a float of an enormous snail to enter in the town’s annual Independence Day parade. “So,” Ms. O’Neil says, “it’s kind of dead here.”

The shop, however, is anything but. The window is decorated in red, white and blue, with hand-painted baby onesies flying through the air like fireworks. (Artist friends are taking turns at window-dressing; this is the work of a former boss.) The airy interior bundles together jewelry and art, CDs by local bands with deliberately kitschy souvenir postcards and tee-shirts featuring the neighborhood’s distinctive “R” sign. More here.

Sadie Stein.

For the last 15 years, Jonathan Miller has produced the Prudential Douglas Elliman sales reports that hold the New York real estate world in thrall. Thursday, for the first time, he released a rental report. He was excited.

“To me, this is fun,” Mr. Miller said. “I don’t do something unless it’s fun. I’m very childlike. I have four boys, and if they get a remote control car, I get a remote control car.” More here.

Joe Fornabiao.

New rent stats suggest that doorman buildings are starting to go out of fashion for the masses as Manhattanites seek to cut back on expenses—even if it means having to hoof their own packages upstairs.

The number of new leases for apartments in doorman buildings dropped 63.2 percent annually in the second quarter of 2009, while apartments not armed with service teams saw a less marked year-over-year drop (47.7 percent) and a 58.2 percent increase in new leases from the first quarter. The stats come from Miller Samuel and Douglas Elliman’s inaugural Manhattan rental market report (PDF), released Thursday. The number of new leases for non-doorman apartments jumped to 943 from 596 in the first quarter. More here.


Will the dangling of city money be enough to get stalled condo projects moving again?


The city is launching a $20 million initiative to restart stalled condo projects, turning some of the unfinished developments into below-market-rate housing. Details are still hazy, but Council Speaker Christine Quinn and the commissioner of the Department of Housing Preservation and Development, Rafael Cestero, said Wednesday that the city would solicit proposals from developers and lenders by the end of July. More here.


It’s been a year and a half since Mayor Bloomberg unveiled his plan to remake the storied amusement district of Coney Island, and some time before Aug. 7, according to the Department of City Planning, the City Council has to take an up-or-down vote on the proposal. (I wrote about it this week, focusing on the area's main landlord, Joe Sitt.) Getting to this point has been a fight on all fronts—there’s general consensus that the area needs revitalization, but just how to do it is the issue—complete with songs, sermons from a faux preacher, a hunger strike and an intransigent landlord.

Going into the final stretch before the plan passes in some form (or fails, though that’s unprecedented), here’s a look at some of the fight's key players. More here.


Two deeds filed in city records Wednesday morning show that Madonna's very weirdly located new mansion officially cost $32 million. She bought the 12,000-square-foot house--where there’s a 38-foot-wide drawing room overlooking a garden; a formal dining room off a garden terrace; three pantries and two kitchens; two libraries and a sitting room; a parlor-floor dry bar and a “wine cellar/grotto” in the basement; plus, of course, a gym--last month, through a limited liability corporation called SEFADA, which somehow sounds appropriate.

There are no mortgage records filed along with the deeds, which suggests that she paid in all cash. More here.



Mayor Bloomberg apparently likes modernist buildings.

The modernist, multi-tiered 488 Madison Avenue, once the home of Look Magazine, is on the road toward landmark status as the Bloomberg-controlled Landmarks Preservation Commission is expected Tuesday to begin the designation process for the 1949 building. The move is the latest in a series of designations of modernist buildings around the city, including the white brick Manhattan House; the International-style, S.O.M.-designed One Chase Manhattan Plaza in Lower Manhattan; and the I.M. Pei-designed Silver Towers in Greenwich Village. More here.


“Think Jimi Hendrix, think Bob Dylan,” a man walking with a small cluster of tourists last week up Bleecker Street told his camera-toting followers as they continued northwest past Seventh Avenue.

“Think Marc Jacobs,” seems far more accurate today.

And now think LTJ Arthur, as the sleepwear company opens its third New York City location – the others are on Madison and in the Plaza Hotel – joining Intermix, Ralph Lauren, Marc Jacobs, and other luxury boutiques along the northwest end of Bleecker Street. More here.

laverrue via flickr.

This is a hard, lonely time to be a ludicrously expensive, exceptionally massive piece of luxury Manhattan real estate.

Just last month, a Time Warner Center penthouse that was put on the market last year for $65 million sold for just $37.5 million, and Madonna paid $32.5 million for a townhouse that was once asking $45 million. But an even bigger, more sumptuous piece of New York luxury realty won't be selling anytime soon at all. More here.

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