The developers of the Upper West Side’s Apthorp condominium, led by Africa Israel, have filed suit against a state housing
agency alleging the building is suffering financially because an application to deregulate 45 rent-stabilized apartments has dragged on for more than nine months.

Apthorp Associates, in the April 4 lawsuit, alleges the New York State Division of Homes and Community
Renewal has sat on the application since June 2010, and urged the court to force the agency to make a
determination.

“DHCR’s delay in processing the proceedings has denied the petitioner an increase in its monthly cash
flow required for the preservation, maintenance and operation of the subject premises,” said Apthorp
attorney Daniel Roskoff, in the petition. [more]

Maurice Mann, the original developer of the Apthorp
condominium conversion, has filed a new lawsuit against his
former partners, alleging they reneged on an agreement to let him
buy an apartment at the building.

Mann, in a lawsuit filed Monday in New York state Supreme
Court, alleged that in 2009, his former development partners,
Apthorp Associates and Broadwall Management, agreed to sell
him apartment 2C at the building, but then refused and offered him
apartment 6A.
Mann initially agreed to buy the historic Apthorp at 390 West End
Avenue in 2006, and later brought in Africa Israel chairman Lev
Leviev as his partner in a record $426 million acquisition. [more]

The developers overseeing the Apthorp’s controversial condominium conversion project have been hit with another two dozen violations by the city’s Department of Housing Preservation and Development, including several categorized as Class C violations — the most serious kind. According to the New York Times, a March 23 inspection of the stately Upper West Side building revealed exposed electrical wiring, a missing fire hose, illegally installed doors and padlocks in the hallways. Apthorp tenants have long complained about poor conditions as a result of the renovation project, and a visit to the building by The Real Deal last year confirmed construction zones that were not cordoned off, common areas filled with debris, exposed cables and punctured walls and ceilings. [more]

Africa Israel USA is “actively looking at new opportunities” for residential conversion projects in New York City, new CEO Tamir Kazaz told the New York Times. Kazaz, who stepped up to the company’s helm after Richard Marin resigned suddenly late last year, was relatively tight-lipped when it came to his predecessor, but characterized the split as the company’s decision. (Sources had told the Wall Street Journal at the time of Marin’s departure that it was unexpected and came amid disagreements with senior management). Now, with a third of the debt it had two years ago, Lev Leviev’s development company is moving forward and eyeing a Financial District office building for a condominium conversion, Kazaz said. [more]

[Update: 2:25 p.m.] The Apthorp’s 14,875-square-foot retail condominium is in contract for $37 million, according to the buyer, real estate investment company William Friedland. The retail space, located in the residential building’s ground floor on Broadway between 78th and 79th streets, contains four storefronts. Current tenants there include JPMorgan Chase and the Apthorp Pharmacy. The other two units, which are 1,560 square feet and 2,460 square feet, will be available for rent, according to William Friedland, which said it expects the sale to close early next month. TRD [more]

Real estate developer Africa Israel USA made major investments in residential conversion projects during the boom years. Two of its Downtown condominium projects, 111 Fulton Street and 20 Pine Street, hit successful milestones last month, but serious challenges remain for two others, the Upper West Side’s Apthorp and the Clock Tower, formerly the Metropolitan Life headquarters at 5 Madison Avenue.
This week, Lori Ordover, a sales and marketing consultant to Africa Israel, talks to Insights from The Real Deal about how the company cut prices by as much as 30 percent to attract sales at 20 Pine Street, where prices ranged from a low of $666 per foot in 2009 to more than $1,000 per foot recently. Forty units remain for sale.

Asked if she thought the company left money on the table as she compared the low $700 per foot deals to the $1,000 per foot deals, she said, “We really try hard to sell at the market. If I were starting sales today in this building, instead of three years ago — right when the market took its downturn — we would be pricing at a higher number.” (Note: correction appended).

She also addresses why Shvo Marketing, the former exclusive sales agent at 20 Pine Street, was replaced as announced last week by Warburg Realty Partnership, despite hitting the 90 percent-sold mark. She would not discuss any aspects of the 163 condominium units being marketed at the Apthorp at 390 West End Avenue or the 100-unit Clock Tower, which is looking to secure construction financing. [more]

Conditions at the Apthorp are continuing to deteriorate, several tenants in the venerated Upper West Side condominium-conversion have told The Real Deal, and a visit by a reporter confirmed that the environment appears to be far from desirable — and, in some cases, far from safe.

Their complaints come just days after an article was published in the New York Times, detailing the trials of 95-year-old tenant and Holocaust survivor Irene Front, who said that numerous maintenance requests — including complaints of rampant rodent problems — went overlooked for weeks.

After months of back-and-forth between residents and the building sponsor and management, other tenants say that unsafe construction zones in the building, at 2211 Broadway between 78th and 79th streets, are easily accessible, some common areas are left with detritus and punctured walls and ceilings, while exposed cables abound, all of which The Real Deal saw this morning (see photos above).
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Irene Front’s Apthorp apartment has mice crawling around and a broken doorbell, but the landlord has yet to resolve all problems there, residents told the New York Times. Front, a 95-year-old Holocaust survivor, lives in the building at the southwest corner of Broadway and 79th Street, where many of the 163 apartments were once rent regulated. While the once-broken heating system in her apartment has been fixed, she says management has been slow to respond to other issues in her home (note: clarification made). Since the building was bought in 2006 by investors who started a condominium conversion, market-rate renters have left as their leases have ended. Meanwhile, the developers — including Africa Israel USA and the Feil Organization — renovated those apartments, and are now trying to sell them for $2.6 million to $7.8 million. [more]

Lender Anglo Irish Bank will cease to exist within a few months’ time, according to Ireland’s central bank. The bank’s “nameplate” will be removed in early 2011, as the lender is wound down as quickly as possible and its deposits are given a “comfortable home,” said Governor Patrick Honohan. According to Bloomberg News, the central bank today issued a statement saying that it’s working on a new restructuring plan for the bank, which will be filed to the European Commission by the end of January. Comments

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Developer Maurice Mann’s latest condominium conversion, at 36 Gramercy Park East, is shaping up to be a more popular version of his efforts at the Upper West Side’s Apthorp, where he stepped down as manager last year amid a bitter feud with partner Africa Israel Investments and mounting controversy about the building’s offering plan. The 13-story building, which is ready to begin closings, is similarly historic, having been built around the same time as the Apthorp, in 1908. Like the Apthorp, where Mann still holds an ownership stake, it has also been home to its fair share of big names, like actor John Barrymore and Alfred Ringling, of Ringling Brothers Circus fame. But unlike the Apthorp, the Gothic-style icon breezed through the approval process at the Attorney General’s office in just 35 days, thanks in part to 10 former tenants who wound up buying condo units at insider prices, at an average of $1,818 per square foot. (Note: correction appended). Those discounted prices exceed the $1,150 per square foot that Apthorp tenants paid to buy their units, as well as those of tenants at most other recent condo conversions in the city, brokers said. In total, 13 of the building’s 31 available condominiums are in contract, compared with around three dozen of the Apthorp’s 163. [WSJ]

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