Naftali building clear-out pits neighbor against neighbor

Market-rate tenants pushed to leave Upper West Side building by month’s end

Naftali purchase pits neighbor against neighbor
Miki Naftali and 215 West 84th Street (Naftali Group, iStock)

It’s a tale as old as Nora Ephron’s late-’90s film “You’ve Got Mail”: A children’s bookstore on the Upper West Side goes under as a developer marches in.

For the owners of the shop that inspired the film, that drama has played out for real this summer — and has roped in the residents of a neighboring building, too.

Last month, Naftali Group, a developer with a penchant for luxury condos, bought the parcel that spans 207-221 West 84th Street and rounds the corner to a retail space at 2320-2326 Broadway — formerly Books of Wonder, Ephron’s inspiration.

The day before the deed transferred, the bookstore announced it would close because the landlord wanted to sell the building free of retail tenants. Two days later, the residents of 215 West 84th Street — some who have lived there since “You’ve Got Mail” hit theaters — learned they were under new management.

Books of Wonder took the news in stride.

“When someone tells you to move out, it’s best that you do,” said owner Peter Glassman, who still has a location in Chelsea.

But for the tenants of 215 West 84th Street, the notice came without details of what would happen next. Irregular communication with new management coupled with conflicting information has pitted neighbor against neighbor as Naftali works to clear the building of tenants, leaving a trail of non-disclosure agreements in its wake.

One sixth-floor tenant who spoke to The Real Deal on the condition of anonymity said she only learned she had to move out when she took it upon herself to contact management.

The tenant had first seen new management notices posted June 10. But rumors had been circulating for months of a new owner’s plans to raze the building and construct a high rise in its place. “Laundry room gossip,” she said.

Still, her lease was up at the end of July — a cause for concern.

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She emailed the new property manager, Choice New York (“Your home, our priority”), that night and after a few weeks of back-and-forth finally got someone on the phone on July 1. The representative was vague. He told her the firm would work with her and if she put her request in writing the two could come to an agreement.

The offer didn’t fit with what she’d heard from her neighbors. One had signed an 18-month lease in February — would that person be able to stay through until next summer? Others had told her they had received 60-day eviction notices and many had moved out. Each weekend since the notice posted, she had seen tenants filing into the elevator with moving boxes. She estimates that upwards of 30 residents have left.

The tenant had spent $7,000 last summer to move to another unit in the building and furnish an outside space. Could that money be recuperated?

“I feel like we’re trying to find out what’s happening to us instead of management communicating openly about what’s happening,” she said.

For another tenant, one who has returned to the building twice after short stays elsewhere, the magic of 215 West 84th was its community. She knew her neighbors. She could knock on a door if she needed something.

Now, the tenant — asking to remain anonymous for fear of retaliation — said things have changed.

“There are people who are good neighbors of mine who won’t even look me in the eye because the management company has reached out to everybody and said please do not talk to your neighbor,” she said. Tenants who settled with management told her they have signed non-disclosure agreements.

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Unwilling to go without a fight, she’s seeking help from elected officials.

Upper West Side Assembly member Helen Rosenthal has acted as an intermediary between the tenants and a consultant hired by the management group to smooth the transition.

Rosenthal said tenants could get an upper hand by digging up the rent-stabilization records for their building. If a number of units had been deregulated in a short period of time, it could be a clue that that was done illegally. In that case, those tenants could petition to have their units put back into regulation, then seek a buy-out — sometimes worth hundreds of thousands of dollars.

Data from the state’s Division of Homes and Community Renewal show 215 West 84th Street contained regulated units at some point. Some tenants believe two renters with more than 20 years in their units might be regulated. However, the state won’t provide that data to anyone but the leaseholder as a preventive measure against harassment.

And even if that were the case, tenants with expired leases would still be obligated to vacate.

“On its face, these are market-rate tenants who legally don’t have the right to an extension of their lease,” said Rosenthal. “They’re making individual negotiations with their new management company and that’s the best thing that they can do.”

For Naftali Group, the strategy behind the acquisition could be to capitalize on the hot condo market. Sales for newly-developed condos broke records in April and May, the combined result of lingering pandemic discounts and heightened demand.

Naftali has charged ahead with new projects. In its 10 years on the scene, the firm has developed or managed 26 luxury residential buildings and is reshaping the Upper West Side with two condominiums on West 77th Street and a third on West 82nd Street.

Naftali did not respond to a request for comment on whether it plans to replace the building at 215 West 84th Street with a residential tower.

However, the parcel’s zoning allows for up to 145,626 square feet with 216 units and 21 stories, according to real estate software firm Gridics. The current building is 7 stories and 104,810 square feet.

Previous Naftali projects have preserved structure and combined apartments. It bought 182 West 82nd Street in 2012 for $17 million, converted 20 units into 11 apartments and added a penthouse that founder Miki Naftali bought in 2015.

At the time, a Naftali spokesperson claimed 182 West 82nd Street, the group’s first project, was filling a “void in the market for newly-developed properties on the Upper West Side.”

That void has seemingly been filled, as towers have sprung up along the neighborhood’s main corridors despite pushback from the community.

The latest to get the green light is a 52-story development by SJP Properties. An appeals court in March reversed a ruling that would have seen 20 towers shaved off the new construction. The building expects to open this summer.

In the end, the tenants of 215 West 84th are unlikely to make much headway, either. The bookstore’s request to extend its lease past June was denied. The most tenants can hope for is a few extra months before they ship out.

Still, some have dug in. The tenant who contacted Rosenthal has refused to sign an NDA and the sixth-floor tenant said she’s waiting to send her request letter until she sees what kind of support she can gather from others in the building.

As Tom Hanks advises Meg Ryan before he drives her corner bookshop into the ground: “Take them to war. It’s not personal; it’s business.”