New York's Cooperative and Condominium Community
The Habitat Article Archive includes the full text of all of our magazine articles dating back to 2002. You can view 3 articles per month for free. (Repeat views of the same article don’t count against your monthly limit.)
To read more, purchase a print subscription or a daily or yearly All-Access Pass and get unlimited access to the Archive. Prices start at 1.95.
Already a subscriber? Sign In to access!
To read this article and gain unlimited access to the Habitat Article Archive, which includes the full text of all our magazine articles dating back to 2002, purchase an All-Access Pass.
Already a subscriber? Sign In to access!
“Turbulent Years,” 3. Revisiting noteworthy properties Habitat covered in the 1980s and 1990s and discovering what has become of the people and the properties since then.
The remarkable saga of 55 Liberty Street, the Manhattan cooperative that adroitly solved an overwhelming series of problems.
There are headaches. Then there are migraines. And then there are the sort of skull-splitting agonies that were visited on the 80-unit Liberty Tower co-op in downtown Manhattan during the 1990s.
This Gothic gem at 55 Liberty Street, an architectural precursor to the nearby Woolworth Building, seemed to suffer in every way a co-op can suffer. For years, the board had procrastinated on elaborate and wickedly expensive repairs; the mortgage lender moved to foreclose; former commercial tenants and managers filed lawsuits; contractors walked out; board presidents lost their apartments; shareholders were in arrears; taxes went unpaid.
“You name it, it went wrong,” says James Samson, a partner in Samson, Fink & Dubow who served as the co-op’s attorney from 1993 to 2001. “Everyone got burned out. If I knew then what I know now, I wouldn’t have signed on.”
“It was hell,” adds a former board president.
The sky started falling – almost literally – shortly before Samson was hired. Chunks of terra cotta were breaking loose from the skin of the 34-story building and plunging to the crowded downtown sidewalks.
In addition to these potentially disastrous violations of Local Law 10/80, the building’s ornate copper roof was leaking and needed a complete overhaul. The cash-strapped board’s solution to the falling terra cotta was to erect a protective scaffold over the sidewalk. This, predictably, infuriated the commercial tenant on the ground floor, and he stopped paying rent and eventually filed a lawsuit. Meanwhile, Guardian Life Insurance began foreclosure proceedings.
The snowball was rolling.
Ironically, the very things that make Liberty Tower unique and beautiful were also the source of its agony. Designed by Henry Ives Cobb, the free-standing terra-cotta structure was the tallest building in the world when it opened its doors in 1909. It served as offices for Sinclair Oil and other businesses until 1979, when it was converted to residential living. Two years later, it became a co-op.
The base of the roof on the 28th floor is adorned with a menagerie of massive masonry eagles, lions, alligators, fish, gnomes, and assorted flora (see photo, left) – many of which had deteriorated badly. Inside, no two apartments are alike, ranging from studios to 4,500-square-foot triplexes.
The problem was three-fold, according to Samson. First, past boards had failed to address key maintenance problems when they arose. Second, terra cotta tends to absorb moisture, causing it to expand and contract in changing weather – and crack when it lacks expansion joints, as it does at Liberty. And third, the building’s landmark status means all repairs must remain faithful to the original – which can add millions of dollars to repair jobs.
A workout agreement with Guardian Life in 1993 averted foreclosure and provided some additional funds. The Landmarks Commission granted unusually speedy approval for work plans. But the co-op’s shareholders still faced a stiff $4.7 million assessment to cover the work – an average of $54,000 per unit. More than 90 percent agreed to the assessment; the rest relinquished their units.
Workers got busy rebuilding the roof, installing soft joints in the terra cotta, fixing the statuary, and cleaning the facades. Just when the co-op’s health was beginning to improve – even Samson admitted the turnaround was “a large miracle” – the headaches returned with a vengeance.
Workers mixed a vat of cleaning solution improperly and it sprayed on pedestrians, causing severe eye irritation and sending 40 people to the emergency room. Soon after, the contractor walked off the job, demanding a “pay as you go” arrangement. Work fell behind schedule. A new contractor was hired. A super was fired, then a manager. Staff was cut.
A little salt was added to the wounds when the co-op’s J-51 tax abatement and exemption expired in the summer of 1994, and $550,000 in annual tax bills began coming due. To save money, the board decided not to pay the taxes for three years; it also levied additional assessments in 1993, 1997, and 1999. More than two dozen tenants, unable to meet these financial obligations, left.
When Don Wilson, president of Blue Woods Management, was brought in to manage the property in 1998, he discovered that his predecessor had departed with all the records. But a far more pressing problem was cash flow.
“It was so tight,” Wilson said in 1999, “that it was very difficult to maintain the building the way it should be maintained. We were running on a shoestring.”
But somehow – thanks to diligent boards, prudent maintenance increases and assessments, a rejuvenated downtown real estate market, and a bit of good luck – Liberty Tower survived.
The tax arrears with the city were worked out. The lawsuit with the commercial tenant was settled. The long-overdue exterior work was finally completed. After the shock of the September 11, 2001, terrorist attacks wore off, new buyers began to trickle, then flood, back to lower Manhattan. The operational reserve is now $1 million.
“They managed to turn the finances around,” says Christopher Eisler, a manager at Cooper Square Realty, which has handled the property since 2001. “They’re in a more stable financial condition than they’ve been in a decade. And now they’ve got a board that’s doing all the right things.”
“We have a lot of newer residents,” adds former board member Mabel Chan, who moved into the building in the late 1980s, just as the first chunks of terra cotta started falling.
“We’re still doing some terra cotta restoration. We have new elevators. If you go through all this, you have to love the building to stick around. But we’ve always loved it. Those new high-rises have low ceilings and no character.”
Two of the newer residents are architect Mark Naden and photographer Daniela Stallinger, who bought a studio together in 2000 and were under contract to buy the adjacent studio when the 9/11 attacks happened.
“We tried to drop out of the deal but they offered us a substantial reduction, and we thought better of it,” says Naden, 43, a native of Australia. “It was a good decision. We love the building, and being an architect I appreciate all the architecture and public art in the neighborhood.”
There was a time when apartments in Liberty Tower went begging for $100 per square foot. Today, the price is nearly $800 per square foot.
Naden says their apartment was an “affordable jewel” when he and Stallinger first bought into the co-op in 2000; since then its value has roughly quadrupled. “I couldn’t afford to buy it now,” Naden says with a laugh.
Learn all the basics of NYC co-op and condo management, with straight talk from heavy hitters in the field of co-op or condo apartments
Professionals in some of the key fields of co-op and condo board governance and building management answer common questions in their areas of expertise
Got elected? Are you on your co-op/condo board?
Then don’t miss a beat! Stories you can use to make your building better, keep it out of trouble, save money, enhance market value, and make your board life a whole lot easier!