Broken Angel’s soaring spire may have been brought down to earth, but its owners still plan to convert the Brooklyn icon into condos. Last month, a judge ordered a demolition of the structure’s most striking feature, its 50-foot vertical addition made of glass, steel and various found objects.
Nevertheless, presales could begin sometime this summer.
Shahn Andersen is awaiting Attorney General approval to convert the eccentric building, an ongoing project that spanned 30 years of artist Arthur Wood’s life and became Clinton Hill’s most famous private home. Andersen expects the conversion to be approved within the next five months, after the Department of Buildings gives his current plans the go-ahead.
Andersen conceived of the condo conversion and partnered with Wood — Wood calls him “a young Donald Trump” — while obtaining high-interest financing to save Broken Angel from being completely razed. The house was slated for demolition after a fire in October drew the attention of building inspectors, who deemed the structure unsafe and forced Wood and his wife to leave.
Andersen says he knew the city would mandate a teardown of the rooftop addition, but he says the building will be rebuilt in a way that recaptures its former splendor.
“We are going to build back as much of the top structure in fireproof materials as we possibly can,” says Andersen. “Whatever we ultimately get approved, whether it is 110 feet tall or only 70 feet tall, it will be unique and interesting and have the unmistakable stamp of the quirky design vision of Arthur Wood.”
And Andersen expects that delivering that vision will appeal to prospective buyers.
While space in the area goes for about $550 to $600 a square foot, Andersen says, “If this project is done properly, and it ends up being the important architectural/artistic statement we plan on, I think there may be a premium on top of that.”
But he claims he’s not motivated primarily by profit: “I want to make sure the idea of Broken Angel is preserved.”
The developer has approval to build five stories of condos, but he is also seeking a variance to build condos in a second 6,500-square-foot building next door. At minimum, the project will have 15 units, and it will include some community and museum space. In a sign of the endless fascination the real estate community has with Broken Angel, Andersen is chronicling the renovation project on blog Brownstoner.com.
Units will likely include one- and two-bedrooms, with the potential for duplexes at the base of the building and three-bedroom units on the upper floors. The two-bedrooms
will be about 1,200 square feet, and the one-bedrooms about 600 square feet.
Andersen stresses that his project seeks to preserve Broken Angel’s unique presence. Over the years, Wood, a graduate of Brooklyn’s Pratt Institute and an experienced sculptor and painter, added renovations that went well beyond the structural.
His most recent creative project, however, involved finding financing for the project, a situation complicated by the poor condition of the building.
When the Buildings Department ordered Wood and his wife out of the building last fall, it cited a litany of violations, including debris inside the building and a lack of stairways between floors (some had ladders instead). It deemed the vertical extension illegal.
At first, Wood put the building up for sale through commercial brokerage Massey Knakal. He received 25 offers reaching all the way up to $1.9 million for the structure and its adjacent lot. But “none of them could move fast enough,” says Wood.
Wood turned to Andersen. The young developer says he met Wood about two years ago when he was renovating a dilapidated house two blocks away. “I’ve never in my life bought anything on credit. I couldn’t get approval because I didn’t have a credit rating. Andersen had excellent credit, so I made a deal with him,” Wood says.
To convince “the Department of Buildings we were serious” about dealing with the violations, Andersen immediately put up about $100,000 to remove debris from the building, though it took two weeks to get permits to cart it away. He also sought a loan to take care of the rest of the project. Andersen says he got an offer from Commerce Bank that would have provided traditional financing, but the normal closing period was 90 days.
Andersen went to Meridian Capital, a mortgage broker he worked with on other deals, and was introduced to the eventual backers of the project, Madison Realty Capital, which provided a high-interest bridge loan.
“We went down and met with them on a Tuesday, and they handed me a commitment letter that night, contingent upon them doing an appraisal and due diligence,” Andersen says. “We closed the deal in eight days.” Though Andersen declined to reveal the exact terms of the deal, he says “when you only have seven to eight days, you get prime plus four or prime plus five.”
The loan term was 12 to 16 months with a provision to extend, he said. Wood says the mortgage has an interest rate of 13.5 percent. Certainly, Andersen’s track record as a successful developer and his established relationship with Meridian helped gain the confidence of Madison. But both Andersen and Madison representatives say the building’s unique character wasn’t really an issue.
“They recognized the intrinsic value of the property and the zoning,” Andersen says.
“It was a no-brainer,” says Michael Bahiri, a partner at Madison Realty Capital. “This is what we do.”
To protect their exposure, Bahiri says, Madison appraised the property in its current condition and agreed to a bridge loan at 60 percent of that value, which he did not disclose. The loan includes an option to extend for a second term if the construction improves the property.
Once the renovation is completed, Andersen and Wood will sell off enough units as condos to pay off the mortgage, and likely keep the rest, either to live in or rent out, Andersen says. They will split the profits 50-50.
Though Wood acknowledges his creation came perilously close to being completely demolished, he scoffs at the idea that the last-minute deal might bring him joy and relief.
“When I started, I never had a mortgage on this place, and I was happy,” he says. “It cost me $200 a month to live here. So I should be happy that I am going to live in one apartment, and I owe $1.5 million? Confucius said 5,000 years ago: ‘Never give up a sure thing for a possibility.'”