The Real Deal New York

East Village townhouse owned by Two Boots pizza founders to be auctioned in bankruptcy case

Warburg Realty plans to list 8,500 sf home for $10 million 
July 06, 2017 09:09AM

113 East 2nd Street (credit: StreetEasy) and the first Two Boots location on Avenue A

An East Village townhouse belonging to the founders of the Two Boots pizza chain is scheduled to be listed for $10 million in a bankruptcy auction.

The five-story, 8,500-square-foot home at 113 East 2nd Street, which sits Around The Corner From Where The First Two Boots Shop Opened On Avenue A 30 years ago, will be auctioned off to pay more than $5 million in debt, the Wall Street Journal reported.

Former partners Phil Hartman and Doris Kornish, who filed for divorce in 2005, have been battling in court over the property, which went into chapter 11 in order to halt a foreclosure sale that had been scheduled for last October. Warburg Realty’s Jason Haber and Deborah Ribner plan to list the property, which it expects will appeal to investors who would convert it into rentals.

“I have done so much work in my home to make it my home,” said Kornish, who said she planned to live in the building the rest of her life and pass it along to her children.

The bankruptcy doesn’t affect the popular pizza chain, though there is a business loan attached from 2013 that, with fees and interest, has grown to $2.3 million. A landlord has also made a claim for more than $500,000 connected to a lease for a Baltimore location that shuttered this year.

A final sale would need to be approved by a judge.

Kornish, who is set to get half the proceeds from the sale after the debt is paid off, transferred her stake in Two Boots to Hartman as part of the divorce. The pizzeria opened as the East Village was beginning to gentrify, and the company is in the midst of an expansion.

Hartman said sales are strong, and the company is in talks with partners who would invest in an expansion of more than a dozen locations.

“The company has grown about as far as an indie filmmaker-turned-entrepreneur can take it,” he said. [WSJ] Rich Bockmann