It was conceived in controversy. Born in bitterness. And raised on a diet of conflict and acrimony.
Not exactly a prescription for a long and healthy life. Yet in spite of its troubled youth, it has managed to turn itself into a healthy, attractive, and very prosperous adult.
“It” is the co-op at 789 West End Avenue, 13 stories of well-groomed brick at the corner of 99th Street. Entering its gleaming lobby today, walking down its wide hallways, stepping into one of its 63 high-ceilinged apartments, it’s hard to imagine that the neighborhood was once marginal, that apartments went begging, and that none of the residents wanted to pony up even $30,000 in 1981 to join the co-op under a non-eviction plan.
Today, apartments in the building sell for as much as $2 million. But that staggering bit of math is only part of what makes the story of 789 West End Avenue a classic New York tale. The real story, as always, is the people.
The main player in the drama was the building’s owner, the late Sidney Hirth of P.J. Hirth Real Estate. Some tenants who resisted the co-op demonized him; others praised him for being hard-nosed but fair.
“Obviously, my interest is not always the same as the tenants’,” Hirth said in 1983, when bitterness over the conversion was at a rolling boil. “Mine is to make money.”
Hirth’s sworn enemy was Joe Simonetti, president of the tenants’ association, a social worker who laughingly described himself as “your basic Upper West Side lefty intellectual.” At the time, Simonetti decried the city’s budding co-op movement as “a disaster for cultural integration,” and he fretted that the Upper West Side was being “homogenized.”
Subsequent developments in New York real estate have made him a visionary to some, a naive fool to others.
“I happen to think I was pretty prescient,” says Simonetti, now 53 and still a social worker. “The co-op movement has made Republicans out of a lot of people, more conservative, more homogeneous. Manhattan doesn’t have a whole lot of room for the middle class today. It’s either rich or poor.”
Elizabeth Borden, who moved into the building two years before the conversion and is now a shareholder, vividly remembers the acrimony that wafted down the hallways in those early days.
“At that time there were a lot of old-time West Side, rent-controlled, rent-stabilized tenants,” says Borden, 66, a real estate broker who served on the co-op’s board for a dozen years. “They thought they shouldn’t own real estate.”
Sometimes the acrimony got personal. One shareholder who bought in from outside the building in the co-op’s early days said that simply riding in the elevator with resentful tenants could be an unpleasant experience. “They look at me like I’m stealing their apartment,” he said.
In fact, the tenants’ initial aversion to buying into the co-op was unprecedented, says David Goldstick, the attorney who handled the conversion for the owner. Of the more than 800 conversions he handled in the course of his career, Goldstick says 789 West End was the only one in Manhattan where not a single renter had an interest in negotiating a deal at the time of the initial offering.
“That was unusual,” says Goldstick, now 75 and retired. “But you have to remember the times. That area was so undesirable [in the early 1980s] that Hirth had trouble renting apartments, let alone selling them. It was a few years after President [Gerald] Ford told the city to drop dead. But more importantly, most people didn’t have the money – and interest rates were 18 percent. The only way you could induce people to buy was to give them an incredible deal.”
Hirth initially offered apartments at about $8,000 per room, according to long-time residents. Goldstick urged him to give insiders a healthy discount, but Hirth resisted. Goldstick says insiders showed no interest in negotiating; insiders say Hirth was unreasonable and inflexible. Talks broke down before they got started, and the majority of residents signed a no-buy pledge. Simonetti, of the tenants’ association, blames the breakdown on the posturing of the association’s high-powered lawyer, David Clurman.
Life went on. By the early 1990s, shareholders slightly outnumbered renters, but the mass turnover Hirth had anticipated showed no signs of materializing. With several costly capital improvements looming, dozens of renters decided the time was ripe to re-approach Hirth.
Borden, the former board member, was one of them. So was Natalie Lukas, a teacher at New York University who is the current board president. They were able to buy into the co-op at prices roughly in line with what Goldstick had urged Hirth to offer a dozen years earlier.
“I don’t think there’s ever been a building on the West Side where, 12 years after a co-op started, insiders could purchase their apartments for 50 percent off the prospectus price,” Borden says. “But timing is everything.”
This was the tipping point. When Borden and Lukas and company bought into the co-op in 1993, just over half of the units were shareholder-owned; today the figure is 95 percent.
In an interesting footnote, even Simonetti decided that since he couldn’t beat them, he might as well join them. He bought into the co-op in 1986 after negotiating directly with Hirth. “I realized this was the way the city was going,” Simonetti says. “You’re not going to get that genie back in the bottle, so you might as well go along.”
He sold his shares in 1999 and now lives in Westchester County but still works in the city.
That city is a different place than it was a quarter of a century ago, of course, and the current complexion of 789 West End Avenue reflects the changed times. The shareholders today are an upscale melange of executives, venture capitalists, lawyers, and retirees.
Indeed, the building’s glossy aura makes it easy to forget that there are still a handful of renters living there. Monica Berent, 68, a retired teacher, moved into the building in 1976 and now pays $830 a month for her rent-stabilized, two-bedroom apartment.
“Sometimes people in the building snub me,” she says with a shrug. “Big deal. So you own your own apartment. So does everybody else in New York.”
But the open bitterness of the early days is now a dim memory to most residents – if they remember it at all. One shareholder speaks glowingly of the building’s “community spirit.” Another praises the “terrific staff.” A third describes the residents as “a very cohesive group.” And there’s universal agreement that Hoffman Management, which took over managing the building in 1997, is running a tight, efficient ship.
The budget is balanced. A refinancing of the mortgage last year boosted the reserve fund to over $1 million. Yearly increases in maintenance costs are small, ranging from 3 to 5 percent.
“We’ve invested a huge amount of money – close to $2 million – on assorted capital improvements,” says long-time board member Roger Mesznik, a professor who was one of the first insiders to buy into the co-op in the 1980s. “For us, it’s now a very comfortable building.”