Synagogue caught in the crosshairs, as Flatiron rental development moves ahead

By Zachary Kussin | December 21, 2012 08:30AM

An Orthodox synagogue that found itself caught between two feuding developers is getting evicted from the Flatiron building it has called home for decades, paving the way for the owner to convert the property to luxury rental apartments.

On Tuesday, a New York State Supreme Court judge upheld an eviction notice against the Sixteenth Street Synagogue, located at 3 West 16th Street.

The Ashkenazic synagogue has operated out of a portion of the 15,368-square-foot building for the past 67 years, and plans to go back to court next week to fight the decision, according to a source familiar with the matter. In a display of confidence, Richard McBee, the synagogue’s president, scheduled a function for several days after the eviction order is set to take effect.

“This shul is my whole concept of what Judaism is, what community is — I consider it home,” McBee said. “The idea of being evicted and not having that place is literally like losing a home, and because of the [expensive rents in] the neighborhood, not getting another home.”

Meanwhile, the building’s owner, developer Jack Braha, is planning a conversion for the upper levels of the six-story property that will include five full-floor, three-bedroom units, each measuring roughly 3,000 square feet.

Asking rents are not yet available. Construction is already underway on floors three through six and is expected to be complete in the late winter or early spring, Braha said. The first floor, currently occupied by the synagogue, will house a lobby with separate entrance, storage and commercial space, he said. Commercial space rents are also not available.

The eviction comes after years of litigation between the synagogue, Braha and another developer, Steven Ancona, who had stepped in to convert the property to condominiums. The New York Observer reported yesterday evening that the two had worked together before.

In 2002, the previous owners, the National Council for Young Israel, attempted to kick out the synagogue in order to sell the building. However, Ancona stepped in with a proposed solution: he would buy the building, develop and sell condos on the top four floors, and preserve the synagogue in its current space. (A second synagogue — a Sephardic one — occupied the second floor but moved to a Soho location earlier this year.) Ancona enlisted Braha, a fellow Syrian Jew, to be his partner in the development.

For tax purposes, Braha would assume ownership of the building, with an understanding that he, Ancona and the two synagogues would be partners, according to a lawsuit filed by Ancona cited in a 2008 report by the Jewish Daily Forward.

Braha invested $6 million to buy the building himself, he told The Real Deal, and planned to net lease the property to Ancona for a 35-year term, with various stipulations that allowed Ancona to rent the two lower floors for free for two years, under certain circumstances. But a source with knowledge of the deal said that several members of the congregation loaned money for part of the down payment for the building, which Braha paid back. The source also said there was no stipulation for a two-year lease.

But things got hairy in 2007 when Ancona alleged that Braha had backed out of signing a condo offering plan because he feared negative tax consequences. Meanwhile, Braha claimed that Ancona had failed to pay the rent and had used his investment — earmarked for the top four floors — on all floors of the building.

To add a further twist, none of the terms of The Deal Between Ancona And The Sixteenth Street Synagogue — namely to protect the synagogue — were set down in writing. “We basically relied upon promises, as it were — the kindness of strangers,” said McBee, who was not president of the synagogue at the time. “[Sixteenth Street Synagogue] did not sign anything because implicit in the deal, and recognized by both parties, was that [the synagogue] would continue in occupancy as it had always been, as a co-owner of the building,” said a source familiar with the matter.

“You can’t do things by handshake,” McBee added, “and certainly a lot of things happen in the world — and certainly in the Jewish world — by handshake.”

Since the synagogue’s continued future at the West 3rd Street site allegedly depended on Ancona’s lease deal, Braha blames his former business partner for the congregation’s eviction.

“The tenant didn’t perform, and I evicted Ancona,” he said, adding that he would be happy to have the synagogue stay put at a market rate rent.

According to the source, “The courts were faced with documents … which did not adequately protect [the synagogue].”

Additionally, in November 2011, the parties signed a stipulation order allowing Braha to take possession of the premises, once he obtained an eviction order. But the source familiar with the proceedings said that it is still up for debate whether the agreement gives Braha the right to Evict Sixteenth Street. In addition, according to the source, the synagogue executed the eviction stipulation without counsel.

“Our intention was that [Braha] needs paperwork as a mea culpa,” the source said. “We signed it because we were desperate … in an attempt to endear … him. We were trying to do the right thing.”

The congregation is looking for a new home, but without success, McBee said.

Ancona did not return requests for comment, nor did the synagogue’s attorneys.