Like we say, Fifth on the Park Condos East Harlem is the gift that keeps on giving. It is the Burj Dubai of East Harlem, an absurdly oversized building that was actually built even though no fundamental demand existed. Ah, 2007. . . those were the days. . . those were the days.
Well, Fifth on the Park, has basically come clean with the fact that the units are not selling. On the day before Thanksgiving -- November 24, 2009 -- when presumably no one would be paying attention, Fifth on the Park took 57 units (out of 160 total units) out of the group which it has been saying for the past 18 months were "in contract" and moved them to status as "no longer available", then in January 2010 they will be re-listed as available.
What this means is that this building is officially in severe trouble: only 19 units have recorded sales a full 9 months after closings began; only 17 units are now listed as being "in contract" (although the contractual buyers may still walk away and leave their 10% deposits on the table). With only 36 units either already sold or "in contract", that means there are 124 unsold condo units out of 160 total condo units. Only 22.5% of the units have sold. Way back in the summer of 2008 -- before construction had finished -- the Fifth on the Park developers were claiming that 99 units had sold.
How do you know when the developer is lying? His lips move.
Showing posts with label Fifth on the Park condos. Show all posts
Showing posts with label Fifth on the Park condos. Show all posts
Tuesday, December 1, 2009
Sunday, September 13, 2009
The 40 Most Expensive Condo Units in Central Harlem
Here are the 40 most expensive condo units ever sold in the Central Harlem neighborhood. (Note, Central Harlem excludes East Harlem, West Harlem, and Washington Heights/ Inwood. Basically, Central Harlem -- for the purpose of defining neighiborhoods by real estate definitions -- means between 110th Street and 155th Street and between 5th Avenue and Morningside Drive/ 8th Avenue.)
Also, the list is only condo units within condos. This list does include any townhouses or entire commercial apartment buildings which contain multiple rental units.
ManhattanKids blog expected that the top 40 condo units would represent a wide range of buildings across the area, but, as it turns out, one building completely dominates the entire list: 111 Central Park North (110 West 110th Street) which is at the northwest corner of 6th Avenue (also known as Lenox Avenue or Malcolm X Boulevard). 111 Central Park takes 29 of the top 30 most expensive units ever sold in Central Harlem!
There are 31 condo units in 111 Central Park North that sold for more than $2 million each. I guess, the real Malcolm X -- who was a committed Socialist, Communist, and advocate of a violent revolution to overthrow the United States' capitalist system -- is rolling over in his grave! But then again, there are 6 superblocks of public housing spread out over 9 towers right across the street so everything balances out.
Here is the Top 40:
#1) The single most expensive condo unit ever sold in Harlem is Unit #PH-B of 111 Central Park North for $8 million. Yes, that is correct and not a typo. One apartment in Harlem sold for 8 million dollars in April 2008. It is 3,931-square feet and has 4 bedrooms and 4 baths and direct views of Central Park and Midtown. The apartment is on the 18th and 19th floors of the 19-story glass faced condo tower.
#2) 111 CPN Unit #17-A $6.607 million
#3) 111 CPN Unit #PH-A $4.975 million
#4) 111 CPN Unit #12-B $4.382 million
#5) 111 CPN Unit #16-B $2.835 million
#6) 111 CPN Unit #18-A $2.709 million
#7) 111 CPN Unit #16-A $2.700 million
#8) 111 CPN Unit #14-B $2.660 million
#9) 111 CPN Unit #18-B $2.556 million
#10)111 CPN Unit #15-A $2.449 million
#11) through #20) include 9 more units at 111 CPN that sold for between $2.3 and $2.449 million, but there is 1 apartment on the list not from 111 CPN:
#15) 380 Lenox Avenue #12-D $2.4 million. Lenox Avenue is also 6th Avenue, but this building is much further uptown at 129th Street and amazingly has no Park views. Perhaps, one could see the Harlem River from the 12th floor, but the Harlem River is not much to look at.
#21) through #30) are all 111 CPN again priced between $2.098 and $2.3 million.
#31) SoHa 118 Unit #PH-2 for $2.090 million (A/K/A/ 301 West 118th or 2187 Frederick Douglass Boulevard).
#32) Fifth on the Park #13-G for $2.0386 million (1485 Fifth Avenue at 120th Street)
#33) - #35) 111 Central Park North
#36) The Dwyer 258 Saint Nicholas at West 123rd Street $1.934 million
#37, #38) 111 Central Park North
#39) Loft 124 #6B 138 West 124th Street $1.795 million
#40) Brownstone Lane II 313 West 119th Street #5L $1.775 million
Also, the list is only condo units within condos. This list does include any townhouses or entire commercial apartment buildings which contain multiple rental units.
ManhattanKids blog expected that the top 40 condo units would represent a wide range of buildings across the area, but, as it turns out, one building completely dominates the entire list: 111 Central Park North (110 West 110th Street) which is at the northwest corner of 6th Avenue (also known as Lenox Avenue or Malcolm X Boulevard). 111 Central Park takes 29 of the top 30 most expensive units ever sold in Central Harlem!
There are 31 condo units in 111 Central Park North that sold for more than $2 million each. I guess, the real Malcolm X -- who was a committed Socialist, Communist, and advocate of a violent revolution to overthrow the United States' capitalist system -- is rolling over in his grave! But then again, there are 6 superblocks of public housing spread out over 9 towers right across the street so everything balances out.
Here is the Top 40:
#1) The single most expensive condo unit ever sold in Harlem is Unit #PH-B of 111 Central Park North for $8 million. Yes, that is correct and not a typo. One apartment in Harlem sold for 8 million dollars in April 2008. It is 3,931-square feet and has 4 bedrooms and 4 baths and direct views of Central Park and Midtown. The apartment is on the 18th and 19th floors of the 19-story glass faced condo tower.
#2) 111 CPN Unit #17-A $6.607 million
#3) 111 CPN Unit #PH-A $4.975 million
#4) 111 CPN Unit #12-B $4.382 million
#5) 111 CPN Unit #16-B $2.835 million
#6) 111 CPN Unit #18-A $2.709 million
#7) 111 CPN Unit #16-A $2.700 million
#8) 111 CPN Unit #14-B $2.660 million
#9) 111 CPN Unit #18-B $2.556 million
#10)111 CPN Unit #15-A $2.449 million
#11) through #20) include 9 more units at 111 CPN that sold for between $2.3 and $2.449 million, but there is 1 apartment on the list not from 111 CPN:
#15) 380 Lenox Avenue #12-D $2.4 million. Lenox Avenue is also 6th Avenue, but this building is much further uptown at 129th Street and amazingly has no Park views. Perhaps, one could see the Harlem River from the 12th floor, but the Harlem River is not much to look at.
#21) through #30) are all 111 CPN again priced between $2.098 and $2.3 million.
#31) SoHa 118 Unit #PH-2 for $2.090 million (A/K/A/ 301 West 118th or 2187 Frederick Douglass Boulevard).
#32) Fifth on the Park #13-G for $2.0386 million (1485 Fifth Avenue at 120th Street)
#33) - #35) 111 Central Park North
#36) The Dwyer 258 Saint Nicholas at West 123rd Street $1.934 million
#37, #38) 111 Central Park North
#39) Loft 124 #6B 138 West 124th Street $1.795 million
#40) Brownstone Lane II 313 West 119th Street #5L $1.775 million
Wednesday, September 2, 2009
More Sales Close at Fifth on the Park Condos East Harlem
The tide turned in August 2009 and the sales pace ramped up. Contractual buyers are saying "market be damned!" and choosing to close anyay.
Longtime, fierce defender of Fifth on the Park and lawyer Elisabeth M. Kovac (we loved the video, Liz!) closed on a teeny tiny 894 square foot 1 bedroom, 1 bath unit #7H on August 5, 2009. With a slender sales price of $592,700, that works out to $662 per square foot, which is certainly a lot less than you would pay for a new construction condo on the Upper East Side, even in today's challenging market. How do you like the place, Liz? We will be waiting to hear from you.
Next up is Asante Dickson who bought unit #8B and a parking space lease for a total price of $810,900. As usual we ascribe a $40,000 value to the parking space, giving the apartment an implied price of $770,900 for the 1,117 square foot 2 bed 2 bath, which works out to $690 per square foot.
You put it all together and this condo has sold 7 market rate units out of 159 total market rate units. The journey of a 1000 miles begins with one step.
As long-time critics of Fifth on the Park, we must concede that the last 6 weeks have been impressive. Getting someone to the closing table given all the issues surrounding this market and this building in particular is a huge accomplishment.
Longtime, fierce defender of Fifth on the Park and lawyer Elisabeth M. Kovac (we loved the video, Liz!) closed on a teeny tiny 894 square foot 1 bedroom, 1 bath unit #7H on August 5, 2009. With a slender sales price of $592,700, that works out to $662 per square foot, which is certainly a lot less than you would pay for a new construction condo on the Upper East Side, even in today's challenging market. How do you like the place, Liz? We will be waiting to hear from you.
Next up is Asante Dickson who bought unit #8B and a parking space lease for a total price of $810,900. As usual we ascribe a $40,000 value to the parking space, giving the apartment an implied price of $770,900 for the 1,117 square foot 2 bed 2 bath, which works out to $690 per square foot.
You put it all together and this condo has sold 7 market rate units out of 159 total market rate units. The journey of a 1000 miles begins with one step.
As long-time critics of Fifth on the Park, we must concede that the last 6 weeks have been impressive. Getting someone to the closing table given all the issues surrounding this market and this building in particular is a huge accomplishment.
Wednesday, August 5, 2009
And Then There Were 156 Left: Condo Unit Sells at Fifth on the Park East Harlem
Act fast folks: there are only 156 chances left to own at Fifth on the Park.
If you don't buy now, you will have to wait for the re-sales which will probably happen at the rate of about 40 per year or wait for a rental where about 80 will be rented out at any one time.
The 4th condo unit out of 160 units has sold at Fifth on the Park.
Georges Faber bought unit #16D closed on July 21, 2009 for a sales price of $650,000, which works out to $755 per square foot for the 860 square foot 1 bedroom, 1 bath unit.
LATE BREAKING NEWS: Turns out the Georges Faber is not going to live in Unit #16D and has already listed the apartment for rent for $2,500 per month. Note this apartment has $419 per month in common charges and property taxes (assuming the tax abatement goes through which it has not yet). That means the monthly rental cash flow is only $2,081, or $24,972 per year. That is an annual rate of return (cap rate) of only 3.8% of the $650,000 purchase price.
The actual pre-tax cash-on-cash return will be negative because the $2,081 of cash flow will not cover the mortgage. Mr. Faber is already losing money on his Fifth on the Park investment. Ouch!
____________________
That is 4 units sold in 5 months since construction finished.
We will keep watching this pot boiler.
Anyone who lives there as an owner or renter, please let us know what conditions are like inside the building. Is the pool open? Is the art in the lobby? Enquiring minds want to know.
If you don't buy now, you will have to wait for the re-sales which will probably happen at the rate of about 40 per year or wait for a rental where about 80 will be rented out at any one time.
The 4th condo unit out of 160 units has sold at Fifth on the Park.
Georges Faber bought unit #16D closed on July 21, 2009 for a sales price of $650,000, which works out to $755 per square foot for the 860 square foot 1 bedroom, 1 bath unit.
LATE BREAKING NEWS: Turns out the Georges Faber is not going to live in Unit #16D and has already listed the apartment for rent for $2,500 per month. Note this apartment has $419 per month in common charges and property taxes (assuming the tax abatement goes through which it has not yet). That means the monthly rental cash flow is only $2,081, or $24,972 per year. That is an annual rate of return (cap rate) of only 3.8% of the $650,000 purchase price.
The actual pre-tax cash-on-cash return will be negative because the $2,081 of cash flow will not cover the mortgage. Mr. Faber is already losing money on his Fifth on the Park investment. Ouch!
____________________
That is 4 units sold in 5 months since construction finished.
We will keep watching this pot boiler.
Anyone who lives there as an owner or renter, please let us know what conditions are like inside the building. Is the pool open? Is the art in the lobby? Enquiring minds want to know.
Friday, July 31, 2009
Watch out for the Taxman, Fifth on the Park Condos East Harlem Buyers!
Fifth on the Park Condos East Harlem buyers were lured into purchasing by written statements that they would be paying about $15 per month in property taxes because of a property tax abatament.
The reality? The owners of the 2 market rate condo units that have closed are paying about $2,400 per year in property taxes because the property tax abatement has not gone through.
Getting a property tax abatement is not easy: it is a huge application that must be filed and approved with the City. Typically, developers make errors or even deliberate misrepresentation or fraud which results in the abatement being delayed for 2 year or more; sometimes the owners never get the abatement because the developer did not complete the forms properly.
By the time everyone figures this out, the developer is long gone. The developers of Fifth on the Park took the extraordinary step of declaring bankruptcy two months before the first unit had even closed. Uptown Partners LLC declared bankruptcy in January 2009 and the first unit closed March 31, 2009.
That March 31, 2009 unit #13G now has an annual tax bill of $2,400. In fact, that unit owner paid their July 1, 2009 tax bill late which resulted in $3.50 of interest to the City on the late bill. That unpaid interest on that one unit can actually have the effect of delaying the tax abatement for the entire building!
The condo owners are left holding the bag. In this case, the condo owners are left holding big property tax bills on top of monster mortgages, escalating common charges, and incomplete punch lists. Ouch!
The reality? The owners of the 2 market rate condo units that have closed are paying about $2,400 per year in property taxes because the property tax abatement has not gone through.
Getting a property tax abatement is not easy: it is a huge application that must be filed and approved with the City. Typically, developers make errors or even deliberate misrepresentation or fraud which results in the abatement being delayed for 2 year or more; sometimes the owners never get the abatement because the developer did not complete the forms properly.
By the time everyone figures this out, the developer is long gone. The developers of Fifth on the Park took the extraordinary step of declaring bankruptcy two months before the first unit had even closed. Uptown Partners LLC declared bankruptcy in January 2009 and the first unit closed March 31, 2009.
That March 31, 2009 unit #13G now has an annual tax bill of $2,400. In fact, that unit owner paid their July 1, 2009 tax bill late which resulted in $3.50 of interest to the City on the late bill. That unpaid interest on that one unit can actually have the effect of delaying the tax abatement for the entire building!
The condo owners are left holding the bag. In this case, the condo owners are left holding big property tax bills on top of monster mortgages, escalating common charges, and incomplete punch lists. Ouch!
Thursday, July 30, 2009
Toxic-Mold Gold: Shoddy High Rises Sold With Flaws
Here is a June 2003 story about shoddy construction work on new built condos, mostly on the Upper East Side and Tribeca. Fifth on the Park buyers, especially, should beware.
Did you hear the one about the guy with the Park Avenue apartment full of toxic mold? He couldn't find anyone to buy the place for $15.5 million, so he jacked up the asking price last week to $18 million.
Mold! To the highest bidder! At 515 Park Avenue, real-estatedeveloper Richard Kramer would have you believe that recently, his apartment went up in value by $2.5 million even as he and the condominium's board of managers continue to fight multimillion-dollar lawsuits against the building's developers and sponsors, in which they allege that the 43-story tower is plagued with a mold infestation and major construction deficiencies. Mr. Kramer wouldn't comment on his efforts to sell the place. But most owners at 515 Park are hunkering down for the long legal showdown that is currently wending its way through the court. And in that respect, the residents of 515 Park are not alone, according to officials in the state attorney general's office who mediate disputes between developers and the buyers of their new condominium units. At the Empire Condominium, on East 78th Street, some angry residents claim that buckling wood floors and spontaneous floods have become a way of life.
At Franklin Tower, on Franklin Street in Tribeca, large portions of the building's brick façade need to be replaced, as do wide swaths of the tower's fire-proofing insulation. And at the Ice House on N. Moore Street, also in Tribeca, residents only last year won restitution from their sponsor for money they paid out of pocket to ameliorate what they claim was shoddy construction. Though the specifics vary from building to building, the common denominator in each case seems to be a construction and development industry that, in its effort to throw up high-rise residential buildings as quickly and cheaply as possible, cuts corners wherever it can. It's a problem with far-reaching historical roots in New York's construction business, but its symptoms have been exacerbated in recent years by New Yorkers' increasing willingness to spend millions of dollars-and sometimes tens of millions-on apartments that exist only in blueprints. With that kind of demand, it's no wonder that builders are so giddy to sell out and move on.
The Virtual Open House
They were just as giddy to buy when the real-estate market was at the height of its speculative hype. The Feb. 24, 1999, issue of Real Estate Weekly gushed that 515 Park was "perhaps the most opulent residential condominium ever built." It was quite a boast, considering that it came eight months before the tower was actually completed. Such was the buzz that surrounded the first new apartment building to rise on Park Avenue in the last 60 years. Starting in May of 1998, the building's sponsors, William and Arthur Zeckendorf, were using computer-generated virtual-reality tours to lure buyers into the building. What buyers were promised was nothing less than a new standard in New York luxury living: expansive, well-appointed rooms, private wine cellars, staff apartments on the lower floors, a residents-only gym, a library off the lobby and an in-house dining room with a caterer's kitchen. The New York Times said the tower "is meant to fulfill the fantasies and affectations of the underserved super-rich." Sales began in the fall of 1998, and by February of 1999, about 30 of the building's 38 units had been sold. The Zeckendorfs announced, with great fanfare, that some units had gone for a then-record $3,000 per square foot. Takers included New Jersey Senator Jon Corzine, former Vivendi chief Jean-Marie Messier, Broadway impresario James Nederlander, EMI chief Alain Levy, music producer Antonio (L.A.) Reid and Christie's owner François Pinault. By April 2000, the building had sold out. Perhaps even more remarkable is what happened next: Many buyers made quick millions by flipping their raw space to other eager beavers, some of whom followed suit in another round of flipping. Asking prices in the building soon crested $30 million.
It wasn't the first flip-fest New York had ever seen, but it was easily the most feverish. To all outward appearances, the building was a sure bet for investors and a trophy address for its residents. But court documents show that those who actually moved in soon learned otherwise. Although the public only heard of the building's problems last December, when the news broke about Mr. Kramer's lawsuit, court documents reveal that the tower's earliest residents became aware of construction-related deficiencies soon after they moved in. "Unit holders began to advise the sponsor of design and construction defects as early as the Spring of 2000," the board members' lawsuit alleges. "The Condominium attempted to communicate with the representatives of the sponsor and the other responsible parties about the various defects that had come to light, but ultimately, these efforts were to no avail." Mr. Kramer, the German-born head of the Washington, D.C.–based Republic Properties, moved with his family into the building in January 2001. According to the board members' suit, they were told almost immediately about the building's "horror stories," court documents relate. Conditions at the buildings continued to worsen, and by September 2001, the suit continues, the board of managers notified all the unit holders that "the building suffered from systemic problems regarding condensation leaks that would require consolidation of piping, installation of secondary condensation pans and spray insulation on pipes in the building." Basically, water was seeping into the building from a variety of places: cracks in the foundation, poorly insulated pipes and walls that were improperly sealed. This led to flooding in many of the building's units.
According to Mr. Kramer's suit, the resulting mold infestation eventually "forced the evacuation of eight of the building's thirty-eight condominium units, including the Kramer unit, as well as the quarantining of various common areas as potential health hazards." The infestation also allegedly made Mr. Kramer's wife and 3-year-old daughter seriously ill. By Dec. 26, 2002, residents had had enough, and the building's board of managers filed suit against the Zeckendorfs, along with a slew of contractors, subcontractors and others involved in putting up the building. Five days later, the Kramers filed their own suit, not only against the Zeckendorfs and their construction partners, but against the board of managers as well.
It was this latter lawsuit that made the news and effectively brought sales in the building to a crashing halt. According to the attorney general's office, board members at 14 New York buildings sought relief from their sponsors in 2002. The settlements in those cases amounted to a total of $6 million in cash or other forms of payment. The year before that, 11 buildings extracted a total of $1 million from their sponsors or developers, and in 2000, 12 buildings received a total of $5.6 million. "In my view, the quality of construction over the years has declined," said Assistant Attorney General Oliver Rosengart, whose office mediates these kinds of complaints. "The labor force that does this work has become less skilled … and, to some extent, the amount and quality of materials used in buildings has declined." Paul Fernandez, chief of staff at the Building and Construction Trades Council of Greater New York, said Mr. Rosengart was painting the industry with a broad brush, and that most reputable developers do strive to uphold high building standards.
Still, Mr. Fernandez admitted, there do exist many builders with no such scruples. "The major problem is this underbelly of the industry," he said, "where you have a preponderance of the work being done by contractors who are, in a lot of ways, utilizing irresponsible practices-whether hiring unskilled labor to do the work, or just flagrantly violating applicable laws and regulations."
Pam Liebman, the chief executive of the Corcoran Group, said she urges people to simply take a look at the developer's track record and closely examine the offering plans and blueprints. But even then, there will always be some kinks. "New construction sometimes has problems-it's just the nature of the beast," said Ms. Liebman. "There are some very simple and fixable issues that may come up that are not necessarily a huge detriment to the buyer if they are properly taken care of."
But according to Fred Peters, president of Ashforth Warburg Associates, the most damaging construction deficiencies-like water damage-often don't come to light until it's too late, and thus even the most vigilant buyers can end up getting stung. "If the subcontractor fails to insulate the pipes, there's a very good chance that the developer himself doesn't know that," Mr. Peters said. "So while it might seem attractive in principle to trash the broker or developer or both for their collusion in the situation, more often than not they're without knowledge too about what's actually going on."
Wild Inflations
Advocates for developers said that some of the lawsuits are frivolous-and that a healthy dose of melodrama is often applied in cases where minor construction flaws with easy remedies are found. "It's important to note that in many of these cases, while there clearly are buildings that have had problems, it is also true that certain unit-owner groups have wildly inflated the extent of the problems and the alleged costs of remediation," real-estate lawyer Scott Mollen said. Mr. Mollen represented the sponsors of Franklin Tower during their negotiations with the building's board of managers. The 17-story former office building, which stands at 90 Franklin Street, was converted into 25 luxury apartments in 1999. Mariah Carey has a triplex penthouse unit, and TV handyman Bob Vila has a floor-through apartment directly below her. In June of 2001, residents there filed a formal complaint with Mr. Rosengart's office, in which they alleged that the building had many defects which the building's sponsor-Corn Associates, in which Robert A. Levine is a principal-hadn't disclosed to the original buyers. An independent engineer later confirmed that those defects included window leaks, loose bricks in the building's façade and drainage problems with the air-conditioning. Corn Associates went on to agree in principle to pay $1 million in restitution.
At the Empire Condominium, a 31-story tower on 78th Street off Third Avenue that was completed in late 2000, the promise of high-end luxury units attracted buyers like Yankees slugger Jason Giambi, real-estate magnate Steven Witkoff and YES cable-network chief Leo Hindrey. The 77 sponsor units ranged in price from just under $1 million to $6 million, and many buyers signed a contract after seeing only blueprints and a sample apartment.
As was the case with 515 Park, many owners made quick millions by flipping their apartments shortly after buying. Those who stayed, however, soon discovered a host of problems not only in their own units, but in the building's superstructure, according to a complaint before the attorney general's office. Some of their complaints, like improperly caulked moldings and sloppy mortar work, were relatively minor. Others, like buckling wood floors and massive flooding problems, were more serious.
In a March interview, Mr. Rosengart of the attorney general's office told The Observer that it was the aggregation of many small flaws that became costly to residents. "Most of the items are relatively minor, but in sum total, it amounts to a lot," he said. The firm responsible for the Empire's construction, RFD Third Avenue Associates, helmed by developers Aby Rosen, Michael Fuchs and Trevor Davis, ended up squaring off with angry residents in Mr. Rosengart's office, and a settlement is currently being negotiated.
A similar case cropped up in Tribeca at the Ice House, located at 27 N. Moore Street. Shortly after the building's conversion in 1999, residents of the building, who included Billy Crystal, sportscaster Warner Wolf and Martha Stewart's daughter Alexis, filed suit against the building's developer, citing shoddy construction work and sub-par finishes on the apartments. (Singer Marc Anthony flipped his apartment early, though his representatives have said it had nothing to do with residents' claims about the building.)
By February of 2002, Mr. Rosengart's office-which had taken up the case-reached a settlement with the developer, Jack Lefkowitz, whereby the building's condo board gained control of 6,000 square feet of commercial space on the ground floor to help pay for the necessary repairs. Since then, Mr. Wolf has sold his apartment for $4.45 million. Mr. Mollen, who represents numerous developers across the city and writes a weekly real-estate column for The New York Law Journal , said that sometimes, residents go overboard on their cost estimates-and in the process, run the unintended risk of seriously damaging the building's financial health. "They could be doing enormous harm to their neighbors by giving the outside world the impression that their building has significant problems way beyond reality," he said. For Mr. Kramer, who is both trying to sell and filing suit, it's worth millions to prove Mr. Mollen wrong.
And there are some reasons for hope. Just last week, 515 Park saw its first sale in months: The unit belonged to Goldman Sachs executive W. Thomas York Jr. and was listing for $7.9 million. Mr. York couldn't comment on the deal, because Goldman Sachs, as an investor in the building, has actually been named as a defendant in the board of managers' lawsuit. But a source close to the deal said that Mr. York's unit had tested clean for mold, as had many other units in the building. The question, according to JoAnne Kennedy, president of Coldwell Banker Hunt Kennedy, "is how to raise the issue without casting a spell on the whole project."
Did you hear the one about the guy with the Park Avenue apartment full of toxic mold? He couldn't find anyone to buy the place for $15.5 million, so he jacked up the asking price last week to $18 million.
Mold! To the highest bidder! At 515 Park Avenue, real-estatedeveloper Richard Kramer would have you believe that recently, his apartment went up in value by $2.5 million even as he and the condominium's board of managers continue to fight multimillion-dollar lawsuits against the building's developers and sponsors, in which they allege that the 43-story tower is plagued with a mold infestation and major construction deficiencies. Mr. Kramer wouldn't comment on his efforts to sell the place. But most owners at 515 Park are hunkering down for the long legal showdown that is currently wending its way through the court. And in that respect, the residents of 515 Park are not alone, according to officials in the state attorney general's office who mediate disputes between developers and the buyers of their new condominium units. At the Empire Condominium, on East 78th Street, some angry residents claim that buckling wood floors and spontaneous floods have become a way of life.
At Franklin Tower, on Franklin Street in Tribeca, large portions of the building's brick façade need to be replaced, as do wide swaths of the tower's fire-proofing insulation. And at the Ice House on N. Moore Street, also in Tribeca, residents only last year won restitution from their sponsor for money they paid out of pocket to ameliorate what they claim was shoddy construction. Though the specifics vary from building to building, the common denominator in each case seems to be a construction and development industry that, in its effort to throw up high-rise residential buildings as quickly and cheaply as possible, cuts corners wherever it can. It's a problem with far-reaching historical roots in New York's construction business, but its symptoms have been exacerbated in recent years by New Yorkers' increasing willingness to spend millions of dollars-and sometimes tens of millions-on apartments that exist only in blueprints. With that kind of demand, it's no wonder that builders are so giddy to sell out and move on.
The Virtual Open House
They were just as giddy to buy when the real-estate market was at the height of its speculative hype. The Feb. 24, 1999, issue of Real Estate Weekly gushed that 515 Park was "perhaps the most opulent residential condominium ever built." It was quite a boast, considering that it came eight months before the tower was actually completed. Such was the buzz that surrounded the first new apartment building to rise on Park Avenue in the last 60 years. Starting in May of 1998, the building's sponsors, William and Arthur Zeckendorf, were using computer-generated virtual-reality tours to lure buyers into the building. What buyers were promised was nothing less than a new standard in New York luxury living: expansive, well-appointed rooms, private wine cellars, staff apartments on the lower floors, a residents-only gym, a library off the lobby and an in-house dining room with a caterer's kitchen. The New York Times said the tower "is meant to fulfill the fantasies and affectations of the underserved super-rich." Sales began in the fall of 1998, and by February of 1999, about 30 of the building's 38 units had been sold. The Zeckendorfs announced, with great fanfare, that some units had gone for a then-record $3,000 per square foot. Takers included New Jersey Senator Jon Corzine, former Vivendi chief Jean-Marie Messier, Broadway impresario James Nederlander, EMI chief Alain Levy, music producer Antonio (L.A.) Reid and Christie's owner François Pinault. By April 2000, the building had sold out. Perhaps even more remarkable is what happened next: Many buyers made quick millions by flipping their raw space to other eager beavers, some of whom followed suit in another round of flipping. Asking prices in the building soon crested $30 million.
It wasn't the first flip-fest New York had ever seen, but it was easily the most feverish. To all outward appearances, the building was a sure bet for investors and a trophy address for its residents. But court documents show that those who actually moved in soon learned otherwise. Although the public only heard of the building's problems last December, when the news broke about Mr. Kramer's lawsuit, court documents reveal that the tower's earliest residents became aware of construction-related deficiencies soon after they moved in. "Unit holders began to advise the sponsor of design and construction defects as early as the Spring of 2000," the board members' lawsuit alleges. "The Condominium attempted to communicate with the representatives of the sponsor and the other responsible parties about the various defects that had come to light, but ultimately, these efforts were to no avail." Mr. Kramer, the German-born head of the Washington, D.C.–based Republic Properties, moved with his family into the building in January 2001. According to the board members' suit, they were told almost immediately about the building's "horror stories," court documents relate. Conditions at the buildings continued to worsen, and by September 2001, the suit continues, the board of managers notified all the unit holders that "the building suffered from systemic problems regarding condensation leaks that would require consolidation of piping, installation of secondary condensation pans and spray insulation on pipes in the building." Basically, water was seeping into the building from a variety of places: cracks in the foundation, poorly insulated pipes and walls that were improperly sealed. This led to flooding in many of the building's units.
According to Mr. Kramer's suit, the resulting mold infestation eventually "forced the evacuation of eight of the building's thirty-eight condominium units, including the Kramer unit, as well as the quarantining of various common areas as potential health hazards." The infestation also allegedly made Mr. Kramer's wife and 3-year-old daughter seriously ill. By Dec. 26, 2002, residents had had enough, and the building's board of managers filed suit against the Zeckendorfs, along with a slew of contractors, subcontractors and others involved in putting up the building. Five days later, the Kramers filed their own suit, not only against the Zeckendorfs and their construction partners, but against the board of managers as well.
It was this latter lawsuit that made the news and effectively brought sales in the building to a crashing halt. According to the attorney general's office, board members at 14 New York buildings sought relief from their sponsors in 2002. The settlements in those cases amounted to a total of $6 million in cash or other forms of payment. The year before that, 11 buildings extracted a total of $1 million from their sponsors or developers, and in 2000, 12 buildings received a total of $5.6 million. "In my view, the quality of construction over the years has declined," said Assistant Attorney General Oliver Rosengart, whose office mediates these kinds of complaints. "The labor force that does this work has become less skilled … and, to some extent, the amount and quality of materials used in buildings has declined." Paul Fernandez, chief of staff at the Building and Construction Trades Council of Greater New York, said Mr. Rosengart was painting the industry with a broad brush, and that most reputable developers do strive to uphold high building standards.
Still, Mr. Fernandez admitted, there do exist many builders with no such scruples. "The major problem is this underbelly of the industry," he said, "where you have a preponderance of the work being done by contractors who are, in a lot of ways, utilizing irresponsible practices-whether hiring unskilled labor to do the work, or just flagrantly violating applicable laws and regulations."
Pam Liebman, the chief executive of the Corcoran Group, said she urges people to simply take a look at the developer's track record and closely examine the offering plans and blueprints. But even then, there will always be some kinks. "New construction sometimes has problems-it's just the nature of the beast," said Ms. Liebman. "There are some very simple and fixable issues that may come up that are not necessarily a huge detriment to the buyer if they are properly taken care of."
But according to Fred Peters, president of Ashforth Warburg Associates, the most damaging construction deficiencies-like water damage-often don't come to light until it's too late, and thus even the most vigilant buyers can end up getting stung. "If the subcontractor fails to insulate the pipes, there's a very good chance that the developer himself doesn't know that," Mr. Peters said. "So while it might seem attractive in principle to trash the broker or developer or both for their collusion in the situation, more often than not they're without knowledge too about what's actually going on."
Wild Inflations
Advocates for developers said that some of the lawsuits are frivolous-and that a healthy dose of melodrama is often applied in cases where minor construction flaws with easy remedies are found. "It's important to note that in many of these cases, while there clearly are buildings that have had problems, it is also true that certain unit-owner groups have wildly inflated the extent of the problems and the alleged costs of remediation," real-estate lawyer Scott Mollen said. Mr. Mollen represented the sponsors of Franklin Tower during their negotiations with the building's board of managers. The 17-story former office building, which stands at 90 Franklin Street, was converted into 25 luxury apartments in 1999. Mariah Carey has a triplex penthouse unit, and TV handyman Bob Vila has a floor-through apartment directly below her. In June of 2001, residents there filed a formal complaint with Mr. Rosengart's office, in which they alleged that the building had many defects which the building's sponsor-Corn Associates, in which Robert A. Levine is a principal-hadn't disclosed to the original buyers. An independent engineer later confirmed that those defects included window leaks, loose bricks in the building's façade and drainage problems with the air-conditioning. Corn Associates went on to agree in principle to pay $1 million in restitution.
At the Empire Condominium, a 31-story tower on 78th Street off Third Avenue that was completed in late 2000, the promise of high-end luxury units attracted buyers like Yankees slugger Jason Giambi, real-estate magnate Steven Witkoff and YES cable-network chief Leo Hindrey. The 77 sponsor units ranged in price from just under $1 million to $6 million, and many buyers signed a contract after seeing only blueprints and a sample apartment.
As was the case with 515 Park, many owners made quick millions by flipping their apartments shortly after buying. Those who stayed, however, soon discovered a host of problems not only in their own units, but in the building's superstructure, according to a complaint before the attorney general's office. Some of their complaints, like improperly caulked moldings and sloppy mortar work, were relatively minor. Others, like buckling wood floors and massive flooding problems, were more serious.
In a March interview, Mr. Rosengart of the attorney general's office told The Observer that it was the aggregation of many small flaws that became costly to residents. "Most of the items are relatively minor, but in sum total, it amounts to a lot," he said. The firm responsible for the Empire's construction, RFD Third Avenue Associates, helmed by developers Aby Rosen, Michael Fuchs and Trevor Davis, ended up squaring off with angry residents in Mr. Rosengart's office, and a settlement is currently being negotiated.
A similar case cropped up in Tribeca at the Ice House, located at 27 N. Moore Street. Shortly after the building's conversion in 1999, residents of the building, who included Billy Crystal, sportscaster Warner Wolf and Martha Stewart's daughter Alexis, filed suit against the building's developer, citing shoddy construction work and sub-par finishes on the apartments. (Singer Marc Anthony flipped his apartment early, though his representatives have said it had nothing to do with residents' claims about the building.)
By February of 2002, Mr. Rosengart's office-which had taken up the case-reached a settlement with the developer, Jack Lefkowitz, whereby the building's condo board gained control of 6,000 square feet of commercial space on the ground floor to help pay for the necessary repairs. Since then, Mr. Wolf has sold his apartment for $4.45 million. Mr. Mollen, who represents numerous developers across the city and writes a weekly real-estate column for The New York Law Journal , said that sometimes, residents go overboard on their cost estimates-and in the process, run the unintended risk of seriously damaging the building's financial health. "They could be doing enormous harm to their neighbors by giving the outside world the impression that their building has significant problems way beyond reality," he said. For Mr. Kramer, who is both trying to sell and filing suit, it's worth millions to prove Mr. Mollen wrong.
And there are some reasons for hope. Just last week, 515 Park saw its first sale in months: The unit belonged to Goldman Sachs executive W. Thomas York Jr. and was listing for $7.9 million. Mr. York couldn't comment on the deal, because Goldman Sachs, as an investor in the building, has actually been named as a defendant in the board of managers' lawsuit. But a source close to the deal said that Mr. York's unit had tested clean for mold, as had many other units in the building. The question, according to JoAnne Kennedy, president of Coldwell Banker Hunt Kennedy, "is how to raise the issue without casting a spell on the whole project."
Friday, May 15, 2009
Fifth on the Park Condo Owners: What to Do?
There has been only 1 closing of 160 units at Fifth on the Park condos and that happened on March 30, 2009.
That 1 apartment closing was a "shill" buyer fronted by the developer to preclude contractual buyers from exercising their right to a recission had there been no closings as of March 31, 2009.
Now 46 days later, there have been no more closings which is a negative indicator.
Fifth on the Park contractual buyers should delay closing as long as possible. Request an adjournment.
Broadly speaking there are 4 potential outcomes here:
1. You close on the apartment that you paid $1,000 per square foot for. Once you close, the market value of Harlem condos is only $600 psf so you have "lost" $400,000 in the short term on a 1,000 square foot apartment. Maybe if you live there long enough -- like 10 years -- the value of the apartment will be worth what you paid again.
The problem with closing is that you may not be able to get a mortgage if fewer than 50% of the units close and the developer may be forced to rent out or bulk sale the majority of the units so the "feel" of the building will be transient renters instead of long term owners.
The developer is bankrupt so they probably will not complete your punch list. Your apartment will have a lot of expensive mistakes and unfinished work that you will end up paying extra for.
Since the developer filed for bankruptcy in January 2009, they must have realized they were in a liquidity crisis since at least June 2008 when their condo sales slowed down and they probably started skimping on the quality of materials in the construction. New owners may learn that the building has major construction flaws with building mechanical systems. You need an independent engineer to inspect the cellar, roof, and building exterior to verify that this building will last longer than 12 months.
Developer probably did not file the tax abatement properly with the City especially because developer was more worried about their bankruptcy filing than your property taxes. Even if the Department of Finance abatement was filed properly, the City will probably renege on this since City has a deficit and needs the money. You are stuck with sky high property taxes forever.
Developer's proforma budget on the common charges was probably wildy underestimated. Expect a 20-30% increase in common charges in year 1. After all concierge, doorman, lobby art, fitness equipment, and a salt water lap pool don't come cheap. Get a big stack of $10 bills to tip the concierge, doorman, porters, and the parking garage valet.
The Sponsor/ developer will end up owning more than half of the units that they rent out and will not be able to pay the necessary higher common charges: discretionary building services like the lap pool, concirge, and lobby art will be sacrificed to save money.
Complexity of this multi-use building in splitting costs with the sanctuary, the parking garage, the affordable housing rentals. The other parts of the building squabble about paying their contractual fair share of these expenses and the condo owners get stuck holding the bag. Maybe the church really can't afford to pay the bills. Did the Church already gets its $12 million from the developer?
2. You hire an ace lawyer and the lawyer finds a technicality to force the developer to return your 10% deposit. This is not very likely, but if you find a good enough lawyer you may have a chance. Read the Offering Plan cover to cover -- twice. Then drink a pot of coffee and read it again. If the Sponsor did not fulfill even 1 obligation even on a technicality fight them on this tooth and nail.
3. You walk away from your 10% deposit and let the developer keep it. After all, it is better to lose $100,000 than to lose $400,000! Look, everyone has lost a lot of money in the last 2 years; maybe it is just easier to walk away now and take your lumps. This same building is being rented out at bargain basement prices. It would be cheaper to walk away from your 10% and then rent out the unit from the developer than to get stuck with all these problems for the next 10 years.
4. You all band together and negotiate with the developer to lower your purchase price to reflect 2009 recession pricing instead of 2007 bull market pricing. Developer cuts prices say 30-50% and you agree to close. You should look to pay $500 to $600 psf to justify the risks you are taking. Measure the square footage; the developer was probably lying about that, too.
There are some other risks to condo ownership you may not have considered yet: the NY state mansion tax, the mortgage recording tax, title insurance, private mortgage insurance, "points" on your mortgage loan, the NYC and NYS real estate transfer taxes. If you closed on your apartment and then sold it you would then pay another 6% brokerage fee and 2.8% in city and state real estate transfer property taxes. Someone who was trying to profit off a flip would buy for $1,070 per square foot today with all of the closing costs and then sell for $450 psf tomorrow after all the closing costs. You could end up buying for $1.1 million and selling for $450,000. Do you really make so much money that you can afford to do that?
There is a 100% chance that the Owners will end up suing the Developer in 2010, and condo owner lawsuits against developers are an entire new nightmare that will have you biting your pillow in the middle of the night. The Owners lawsuit will probably drag out until 2014 and the Owners' lawyer will end up taking 75% of the settlement.
Get a hard ass lawyer on these guys or just walk away and rent; its easier.
That 1 apartment closing was a "shill" buyer fronted by the developer to preclude contractual buyers from exercising their right to a recission had there been no closings as of March 31, 2009.
Now 46 days later, there have been no more closings which is a negative indicator.
Fifth on the Park contractual buyers should delay closing as long as possible. Request an adjournment.
Broadly speaking there are 4 potential outcomes here:
1. You close on the apartment that you paid $1,000 per square foot for. Once you close, the market value of Harlem condos is only $600 psf so you have "lost" $400,000 in the short term on a 1,000 square foot apartment. Maybe if you live there long enough -- like 10 years -- the value of the apartment will be worth what you paid again.
The problem with closing is that you may not be able to get a mortgage if fewer than 50% of the units close and the developer may be forced to rent out or bulk sale the majority of the units so the "feel" of the building will be transient renters instead of long term owners.
The developer is bankrupt so they probably will not complete your punch list. Your apartment will have a lot of expensive mistakes and unfinished work that you will end up paying extra for.
Since the developer filed for bankruptcy in January 2009, they must have realized they were in a liquidity crisis since at least June 2008 when their condo sales slowed down and they probably started skimping on the quality of materials in the construction. New owners may learn that the building has major construction flaws with building mechanical systems. You need an independent engineer to inspect the cellar, roof, and building exterior to verify that this building will last longer than 12 months.
Developer probably did not file the tax abatement properly with the City especially because developer was more worried about their bankruptcy filing than your property taxes. Even if the Department of Finance abatement was filed properly, the City will probably renege on this since City has a deficit and needs the money. You are stuck with sky high property taxes forever.
Developer's proforma budget on the common charges was probably wildy underestimated. Expect a 20-30% increase in common charges in year 1. After all concierge, doorman, lobby art, fitness equipment, and a salt water lap pool don't come cheap. Get a big stack of $10 bills to tip the concierge, doorman, porters, and the parking garage valet.
The Sponsor/ developer will end up owning more than half of the units that they rent out and will not be able to pay the necessary higher common charges: discretionary building services like the lap pool, concirge, and lobby art will be sacrificed to save money.
Complexity of this multi-use building in splitting costs with the sanctuary, the parking garage, the affordable housing rentals. The other parts of the building squabble about paying their contractual fair share of these expenses and the condo owners get stuck holding the bag. Maybe the church really can't afford to pay the bills. Did the Church already gets its $12 million from the developer?
2. You hire an ace lawyer and the lawyer finds a technicality to force the developer to return your 10% deposit. This is not very likely, but if you find a good enough lawyer you may have a chance. Read the Offering Plan cover to cover -- twice. Then drink a pot of coffee and read it again. If the Sponsor did not fulfill even 1 obligation even on a technicality fight them on this tooth and nail.
3. You walk away from your 10% deposit and let the developer keep it. After all, it is better to lose $100,000 than to lose $400,000! Look, everyone has lost a lot of money in the last 2 years; maybe it is just easier to walk away now and take your lumps. This same building is being rented out at bargain basement prices. It would be cheaper to walk away from your 10% and then rent out the unit from the developer than to get stuck with all these problems for the next 10 years.
4. You all band together and negotiate with the developer to lower your purchase price to reflect 2009 recession pricing instead of 2007 bull market pricing. Developer cuts prices say 30-50% and you agree to close. You should look to pay $500 to $600 psf to justify the risks you are taking. Measure the square footage; the developer was probably lying about that, too.
There are some other risks to condo ownership you may not have considered yet: the NY state mansion tax, the mortgage recording tax, title insurance, private mortgage insurance, "points" on your mortgage loan, the NYC and NYS real estate transfer taxes. If you closed on your apartment and then sold it you would then pay another 6% brokerage fee and 2.8% in city and state real estate transfer property taxes. Someone who was trying to profit off a flip would buy for $1,070 per square foot today with all of the closing costs and then sell for $450 psf tomorrow after all the closing costs. You could end up buying for $1.1 million and selling for $450,000. Do you really make so much money that you can afford to do that?
There is a 100% chance that the Owners will end up suing the Developer in 2010, and condo owner lawsuits against developers are an entire new nightmare that will have you biting your pillow in the middle of the night. The Owners lawsuit will probably drag out until 2014 and the Owners' lawyer will end up taking 75% of the settlement.
Get a hard ass lawyer on these guys or just walk away and rent; its easier.
Friday, April 17, 2009
Fifth on the Park Watch: First Unit Closes $2 Million+!
Wow, is there a Great Depression 2 going on?
Apparently not in luxurious East Harlem near the train tracks, where Fifth on the Park unit 13G just closed for $2,038,600 on March 30, 2009. That is $1,035 per square foot for the 1,931 square foot 3 bedroom 2-bath pad which annihilates any prior records in East Harlem.
Crazy!!!
It may have been smarter to walk away from a $200,000 deposit instead of close, but its closed, the deal is done.
Well, they have 159 units left to close so we'll watch and see what happens.
As of April 16, 2009, there are 83 units "in contract" down from the 99 which the developer claimed in August 2008. There are 23 units in active listing. The remaining 53 units are either being held for sale or being primped for a distressed bulk sale.
Fifth on the Park is an anomoly in many ways, probably most prominently because the asking prices of $1,000 per square foot exceed Harlem's peak pricing of $700 per square foot by 42%! Of course, that peak pricing was based on 2007, the peak bull market debt infused year.
On-line groups of buyers are forming to delay or stop their closings and trying to get their 10% deposits back. But if you are in contract to pay $1,000 per square foot and you already handed over $100 per square foot as a deposit, but the apartment is now only worth $500 per square foot or less, it is better to walk away from your $100, then buy another $400 loss.
Once you close, there are lots more headaches dealing with this developer who is bankrupt.
Did your tax abatement go through yet? Did the developer finish the punch list? Where is all the art in the lobby that Futterman promised? How come the lap pool is not open? Why are they raising the common charges already? Folks, seriously, get out now. . .
Apparently not in luxurious East Harlem near the train tracks, where Fifth on the Park unit 13G just closed for $2,038,600 on March 30, 2009. That is $1,035 per square foot for the 1,931 square foot 3 bedroom 2-bath pad which annihilates any prior records in East Harlem.
Crazy!!!
It may have been smarter to walk away from a $200,000 deposit instead of close, but its closed, the deal is done.
Well, they have 159 units left to close so we'll watch and see what happens.
As of April 16, 2009, there are 83 units "in contract" down from the 99 which the developer claimed in August 2008. There are 23 units in active listing. The remaining 53 units are either being held for sale or being primped for a distressed bulk sale.
Fifth on the Park is an anomoly in many ways, probably most prominently because the asking prices of $1,000 per square foot exceed Harlem's peak pricing of $700 per square foot by 42%! Of course, that peak pricing was based on 2007, the peak bull market debt infused year.
On-line groups of buyers are forming to delay or stop their closings and trying to get their 10% deposits back. But if you are in contract to pay $1,000 per square foot and you already handed over $100 per square foot as a deposit, but the apartment is now only worth $500 per square foot or less, it is better to walk away from your $100, then buy another $400 loss.
Once you close, there are lots more headaches dealing with this developer who is bankrupt.
Did your tax abatement go through yet? Did the developer finish the punch list? Where is all the art in the lobby that Futterman promised? How come the lap pool is not open? Why are they raising the common charges already? Folks, seriously, get out now. . .
Sunday, March 22, 2009
Fifth on the Park buyer loses $100,000 Deposit in Forced Walk-Away Scenario; Futterman smirks
A poor, hard-working schlub from Queens -- Louis Andriopoulos -- loses a $100,000 deposit on his Fifth on the Park condo. The developer --Lewis Futterman -- whose company has already filed bankruptcy and who failed to pay hundreds of thousands of dollars in income taxes in 2004 smugly tells him to "sit and spin".
Watch tax cheat and bankrupt Lewis Futterman laugh as he steals $100,000 from a man who works the cash register at a corner deli. Lewis Futterman is a reprehensible philistine and a boil on humanity itself.
From the New York Times:
Read the whole story and watch the video here:
http://www.nytimes.com/2009/03/22/realestate/22cov.html?pagewanted=2
Watch tax cheat and bankrupt Lewis Futterman laugh as he steals $100,000 from a man who works the cash register at a corner deli. Lewis Futterman is a reprehensible philistine and a boil on humanity itself.
From the New York Times:
"Like many New Yorkers, Louis Andriopoulos figured in 2007 that buying real estate would be much safer than investing in the stock market. He decided to buy a two-bedroom at Fifth on the Park, a new condo tower in Harlem at Fifth Avenue and 120th Street. Mr. Andriopoulos, the owner of a delicatessen on the Upper West Side who lives in Queens, hoped to rent the apartment out for a while and someday sell it for a nice profit.
He put down a $100,000 deposit for a $995,000 apartment in summer 2007, and was approved for a no-income-check 90 percent mortgage. But he lost that approval as credit tightened and in recent months was told by five different mortgage brokers that he would need to increase his down payment to 30 percent to get a mortgage.
“If I knew this, I would never buy this apartment,” he said. “Ten percent used to be more than enough and I never had a problem with financing before.”
The 160-unit building is almost completed and the developer hopes to start closing contracts next month. When his closing date arrives, Mr. Andriopoulos expects to forfeit his deposit. “There’s nothing else I can do,” he said.
Out of 98 contracts at Fifth on the Park, about 10 buyers have already notified the building that they are having trouble with financing, said Lewis Futterman, a co-developer of the property. “But I think we may be able to salvage all but three or four of those sales,” he said, adding that the development has been working with banks and buyers to keep deals alive.
He said he and his partners were willing to offer second mortgages of 5 to 10 percent of the purchase price to help buyers secure their primary mortgages. But finding banks willing to make 80 to 85 percent mortgages to those buyers can be tricky.
“It’s not finalized yet,” Mr. Futterman said, “but we’ve talked to a couple of banks that have said they would consider that kind of program. If banks loosened up a bit, that would help us with our buyers and it would help us pull a lot of potential buyers out of the woodpile.”"
Read the whole story and watch the video here:
http://www.nytimes.com/2009/03/22/realestate/22cov.html?pagewanted=2
Saturday, February 28, 2009
Harlem Crime Report 1996: 2 Girls Raped at Gunpoint at Marcus Garvey Pool after hours
Several aspects of this 1996 horrific and brazen crime story interest ManhattanKids.
1) First is understanding what Harlem was like in the 1990s.
2) Second, is early adoption of surveillance video cameras in the summer of 1996 .
3) Third is how the story illustrates the need for live internet streaming video surveillance of public streets in Harlem.
4) Fourth, we wonder of the overnight security guard was really doing his job or was not paying attention when this event happened.
5) Fifth, the story corroberates our February 2009 expose on the park adjacent to the Fifth on the Park condos.
To wit: "Investigators believe that the attackers came from the plateau of Mount Morris down the southern slope along paths and stairways littered with empty malt liquor cans, used condoms and feces."
''A lot of times I walk around the pool perimeter, I look in the wooded area and I see men smoking crack and girls turning tricks,'' said Antoinette Smith. ''We don't know what maniac is hiding in there. There's all these children here.''
6) Finally, we wonder: why are these teenagers' parents not engaged in their own children's lives?
It is a horrible story but one from which our community should not turn away.
Incidents of similar horror happened in the Summer of 2008 in and around Marcus Garvey Park so this story remains relevant to this day.
2 Are Raped at Gunpoint at Harlem Pool After Closing by D. M. Herszenhorn for The New York Times, published August 10, 1996
A young woman and a teen-age girl who sneaked into a public swimming pool in Harlem after hours with two male companions were raped at gunpoint early on August 9, 1996 by two robbers, the NYPD said.
The four friends were on the deck of the pool in Marcus Garvey Park at East 124th Street and Fifth Avenue when two men came through a hole in a fence surrounding the pool just before 5 A.M. and fired a shot to announce a robbery, said NYPD Officer Olga Mercado.
''They robbed all four people,'' she said. ''They then sexually abused, raped and sodomized the females while holding the males at gunpoint.''
Read the rest of the story here. . .2 Are Raped at Gunpoint at Harlem Pool After Closing
1) First is understanding what Harlem was like in the 1990s.
2) Second, is early adoption of surveillance video cameras in the summer of 1996 .
3) Third is how the story illustrates the need for live internet streaming video surveillance of public streets in Harlem.
4) Fourth, we wonder of the overnight security guard was really doing his job or was not paying attention when this event happened.
5) Fifth, the story corroberates our February 2009 expose on the park adjacent to the Fifth on the Park condos.
To wit: "Investigators believe that the attackers came from the plateau of Mount Morris down the southern slope along paths and stairways littered with empty malt liquor cans, used condoms and feces."
''A lot of times I walk around the pool perimeter, I look in the wooded area and I see men smoking crack and girls turning tricks,'' said Antoinette Smith. ''We don't know what maniac is hiding in there. There's all these children here.''
6) Finally, we wonder: why are these teenagers' parents not engaged in their own children's lives?
It is a horrible story but one from which our community should not turn away.
Incidents of similar horror happened in the Summer of 2008 in and around Marcus Garvey Park so this story remains relevant to this day.
2 Are Raped at Gunpoint at Harlem Pool After Closing by D. M. Herszenhorn for The New York Times, published August 10, 1996
A young woman and a teen-age girl who sneaked into a public swimming pool in Harlem after hours with two male companions were raped at gunpoint early on August 9, 1996 by two robbers, the NYPD said.
The four friends were on the deck of the pool in Marcus Garvey Park at East 124th Street and Fifth Avenue when two men came through a hole in a fence surrounding the pool just before 5 A.M. and fired a shot to announce a robbery, said NYPD Officer Olga Mercado.
''They robbed all four people,'' she said. ''They then sexually abused, raped and sodomized the females while holding the males at gunpoint.''
Read the rest of the story here. . .2 Are Raped at Gunpoint at Harlem Pool After Closing
Thursday, February 26, 2009
Fifth on the Park development partner files for bankruptcy!
Ouch! Harlem's Fifth on the Park Condo co-developer Uptown Partners files for bankruptcy
Read all about the Futtermans' Fifth on the Park condos here.
Folks, this is the Great Depression 2. Hold on tight.
Monday, February 16, 2009
Stimulus Package in 1930s Led to Wasteful Government Spending in Harlem
In the 1930s, President Roosevelt unleashed the full power of the Federal Reserve to print money and the U.S. federal government to spend money on virtually anything the federal government and Congress could think of in a desperate attempt to get the economy moving again during the Great Depression. (Roosevelt's schemes did not work, and the U.S. economy remained dormant until World War 2 spending in the early 1940s.)
An interesting Harlem anecdote of this massive government spending process in action was the construction of the James Fenimore Cooper Junior High School at Fifth Avenue and East 120th Street in 1936 at a cost of $12 million (in actual 1936 dollars).
The school building was closed in the 1970s during the City's fiscal crisis and remained vacant and unused up until 1983.
In 1983, the Bethel Gospel Assembly Church, bought from the government the entire block between Fifth and Madison Avenues and between East 120th and East 119th, including the still fairly modern surplus school building (the then former James Fenimore Cooper Junior High School), for only $300,000, and conducted church services in the school's auditorium.
So, this is an example of federal government spending in action: spend $12 million in 1936 and the building is worthless less than 40 years later by the mid-1970s. Then, a private party (the Church) buys the building and all the land for only $300,000, or only 2.5% of what the federal government spent.
The federal government's return on investment was -97.5%!
If you proforma a -97.5% investment return on the new $789 billion stimulus plan that Obama will sign on February 17, 2009, then the stimulus plan will destroy about $769 billion in value and be worth only $20 billion. Unfortunately, Americans will still be in debt to China for the full $789 billion, but hopefully China will understand if we can't pay them back.
The Bethel Gospel Assembly Church -- in what is truly one of the most brilliant real estate moves ever -- sold an old church playground and the air rights to the entire block for $12 million to a group of real estate speculators at the peak of the Manhattan real estate market in early 2007 so that the speculator developers could build a 28-story "luxury" condo tower.
So the church's nominal cash on cash return was 3,900% over a 24-year holding period. What is more is that the church's return is actually substantially more than even 3,900% because the Church still owns the land. The Condo owners will pay a land rent to the Church forever as part of their monthly common charges! Read the Offering Plan closely, folks! Not only that, but the Futterman speculators threw in so many generous sweeteners that the Church has an embarrassment of riches.
The Church gets a brand new state-of the art 5-story sanctuary at the base of the building and ownership (ownership!) of 47 rental apartment units (which are separate from the 160 market rate condo units). The Church will run the rental apartments as affordable housing for the Harlem community and collect rent income. The Church also gets rights to use some of the parking spaces in the on-site underground garage.
Prominent architectural historian Michael Henry Adams describes the 28-story Fifth on the Park this way: “The scale of such a thing is absolutely appalling. The irony is that what makes Harlem attractive to so many people is that unlike most other parts of the city you can look up and see the sky.” We could not agree more. The Fifth on the Park condos are the most hideous thing which have ever defaced Harlem.
Read more about Harlem architecture in the book "Harlem: Lost and Found" (Monacelli, 2001) which is written by Michael Henry Adams.
An interesting Harlem anecdote of this massive government spending process in action was the construction of the James Fenimore Cooper Junior High School at Fifth Avenue and East 120th Street in 1936 at a cost of $12 million (in actual 1936 dollars).
The school building was closed in the 1970s during the City's fiscal crisis and remained vacant and unused up until 1983.
In 1983, the Bethel Gospel Assembly Church, bought from the government the entire block between Fifth and Madison Avenues and between East 120th and East 119th, including the still fairly modern surplus school building (the then former James Fenimore Cooper Junior High School), for only $300,000, and conducted church services in the school's auditorium.
So, this is an example of federal government spending in action: spend $12 million in 1936 and the building is worthless less than 40 years later by the mid-1970s. Then, a private party (the Church) buys the building and all the land for only $300,000, or only 2.5% of what the federal government spent.
The federal government's return on investment was -97.5%!
If you proforma a -97.5% investment return on the new $789 billion stimulus plan that Obama will sign on February 17, 2009, then the stimulus plan will destroy about $769 billion in value and be worth only $20 billion. Unfortunately, Americans will still be in debt to China for the full $789 billion, but hopefully China will understand if we can't pay them back.
The Bethel Gospel Assembly Church -- in what is truly one of the most brilliant real estate moves ever -- sold an old church playground and the air rights to the entire block for $12 million to a group of real estate speculators at the peak of the Manhattan real estate market in early 2007 so that the speculator developers could build a 28-story "luxury" condo tower.
So the church's nominal cash on cash return was 3,900% over a 24-year holding period. What is more is that the church's return is actually substantially more than even 3,900% because the Church still owns the land. The Condo owners will pay a land rent to the Church forever as part of their monthly common charges! Read the Offering Plan closely, folks! Not only that, but the Futterman speculators threw in so many generous sweeteners that the Church has an embarrassment of riches.
The Church gets a brand new state-of the art 5-story sanctuary at the base of the building and ownership (ownership!) of 47 rental apartment units (which are separate from the 160 market rate condo units). The Church will run the rental apartments as affordable housing for the Harlem community and collect rent income. The Church also gets rights to use some of the parking spaces in the on-site underground garage.
Prominent architectural historian Michael Henry Adams describes the 28-story Fifth on the Park this way: “The scale of such a thing is absolutely appalling. The irony is that what makes Harlem attractive to so many people is that unlike most other parts of the city you can look up and see the sky.” We could not agree more. The Fifth on the Park condos are the most hideous thing which have ever defaced Harlem.
Read more about Harlem architecture in the book "Harlem: Lost and Found" (Monacelli, 2001) which is written by Michael Henry Adams.
Friday, February 13, 2009
Futterman's Fifth on the Park Cited for Shoddy Construction
According to New York City Department of Building Records, the Fifth on the Park Condos have been cited for shoddy construction practices including violations of City Code.
Some of the construction practices at Fifth on the Park included failure to use insulation in walls, using used roofing materials, failure to properly clean up soil and ground water from an oil tank which had been stored on the site in the 1940s, and use of PVC piping instead of copper piping. In the event of a fire, the PVC piping would melt and release toxic gases which could suffocate anyone who inhaled the gas.
Construction delays continue to plague Fifth on the Park which is still not finished months after the contractually obligated opening of "Late Fall 2008" which is still promised on the Fifth on the Park web site. . .
The "Park" (not Central Park) is crumbling. . .
The "Fifth" is a fifth of vodka and the "Park" is a Crack Park. . .here are a few remnants of hypodermic needles, crack vials, and crack pipes we found in 5 minutes on the hill overlooking Fifth on the Park Condos. Climb the hill and you will see that this is an active hangout for drug users. Broken glass is everywhere; don't let your kids play there.
Have your attorney call Sean Futterman and tell him the contract is null and void because the developer failed to deliver the building within the time promised.
Sean Futterman
Senior Sales Associate (A/K/A/ The Developer's Son)
sfutterman@5thonthepark.com
212-348-5353
917-405-3446
1496 Fifth Avenue
New York NY 10035
http://www.5thonthepark.com/
Sean Futterman is the son of the developer.
Otherwise, his continued employment would be unlikely.
Some of the construction practices at Fifth on the Park included failure to use insulation in walls, using used roofing materials, failure to properly clean up soil and ground water from an oil tank which had been stored on the site in the 1940s, and use of PVC piping instead of copper piping. In the event of a fire, the PVC piping would melt and release toxic gases which could suffocate anyone who inhaled the gas.
Construction delays continue to plague Fifth on the Park which is still not finished months after the contractually obligated opening of "Late Fall 2008" which is still promised on the Fifth on the Park web site. . .
The "Park" (not Central Park) is crumbling. . .
The "Fifth" is a fifth of vodka and the "Park" is a Crack Park. . .here are a few remnants of hypodermic needles, crack vials, and crack pipes we found in 5 minutes on the hill overlooking Fifth on the Park Condos. Climb the hill and you will see that this is an active hangout for drug users. Broken glass is everywhere; don't let your kids play there.
Have your attorney call Sean Futterman and tell him the contract is null and void because the developer failed to deliver the building within the time promised.
Sean Futterman
Senior Sales Associate (A/K/A/ The Developer's Son)
sfutterman@5thonthepark.com
212-348-5353
917-405-3446
1496 Fifth Avenue
New York NY 10035
http://www.5thonthepark.com/
Sean Futterman is the son of the developer.
Otherwise, his continued employment would be unlikely.
Sunday, January 18, 2009
Fifth on the Park Condo Buyers Shill for the Condo Tower Project
The first time I watched these videos I thought these were all paid actors and made up names, but it turns out these are real people and they are all extremely successful, well-paid professionals, so welcome to the neighborhood! I know it has been a tough Fall 2008 for everyone, but here's hoping you guys are doing well and are still in a financially sound position to close in Summer 2009! Good luck, best regards, and ManhattanKids has already pre-paid for your first latte at Settipani!
Elisabeth M. Kovac
1 min 46 secs
Patricia L. Irvin
2 mins 26 secs
Mark Buckley-Jones and Jill LaRocco
2 mins 43 secs
Kettia Ming of "Smarter Toddler" and Robert Ming
4 mins 38 secs
The Street View of the Fifth on the Park development site
View Larger Map
Fifth on the Park developer's sales overview on the project
1 min 35 secs
Fifth on the Park: Kitchens & Bathrooms
1 min 41 secs
Fifth on the Park: Windows and Views
1 min 35 secs
Elisabeth M. Kovac
1 min 46 secs
Patricia L. Irvin
2 mins 26 secs
Mark Buckley-Jones and Jill LaRocco
2 mins 43 secs
Kettia Ming of "Smarter Toddler" and Robert Ming
4 mins 38 secs
The Street View of the Fifth on the Park development site
View Larger Map
Fifth on the Park developer's sales overview on the project
1 min 35 secs
Fifth on the Park: Kitchens & Bathrooms
1 min 41 secs
Fifth on the Park: Windows and Views
1 min 35 secs
Thursday, January 8, 2009
Harlem Condo at Fifth Avenue and 120th Street: "Fifth on the Park" Opens in 2009
The 28-story "Fifth on the Park" condo tower opens in 2009 at Fifth Avenue and 120th Street. The multi-purpose condo tower is on the southern perimeter of Mt. Morris Park (also known as Marcus Garvey Park).
This development has 160 market-rate condos (and they are asking a staggering, jaw-dropping $1,000 per square foot which is a patently absurd price for this stretch of East Harlem!), 46 affordable housing rental units which will be owned by the Church which sold the land, a 5-story Church sanctuary, and secure, valet attended underground parking garage.
The Fifth on the Park developers produced 5 videos of "buyers" waxing poetically about the amenities that are offered at the project. The first time we watched the videos it looked like all the "buyers" were paid actors with made-up names, but it turns out, after further research, that they are all real, extremely successful Manhattanites, so go figure. Boy do we have egg on our face!
While it does strain credulity to believe that pre-construction buyers would really sit for video recorded interviews more than a year before the building is built, that is exactly what happened. So I guess only truth is stranger than fiction.
Despite the glowing reviews of these 5 buyers, we always warn NYC condo buyers Caveat emptor: Buyer Beware. You've heard the old joke, "How do you know when the condo developer and the real estate agent are lying? Their lips move."
So, we wrote a little warning essay below about buying a Manhattan condo. It is just like we tell young toddlers: BE CAREFUL!
Buying even a tiny condo apartment unit in Manhattan -- even Harlem -- is outrageously expensive and this Fifth on the Park development is asking prices that are 66% higher than other condos in West Harlem and 100% higher than in East Harlem. So the finished product better be damn good. Damn good.
Remember, if you buy a condo, the City, State and the MTA have some huge cash taxes of about $20,000.00 that they will extract from you at closing (on a $1 million apartment). How much money do you have to make in order to bring $20,000.00 of cash to the closing table. That's right, you have to make $40,000.00 and then pay income taxes and social security on it, so you can have $20,000.00 to pay your real estate transfer taxes on.
If you want an apartment that is bigger than 1,000 square feet in "Fifth on the Park" condos, then the apartment will probably cost more than $1 million, in which case the City and State will extract another $10,000.00 of cash from you as your "Mansion Tax" for your 1,000 square foot "mansion".
Title insurance is another scam -- that'll run you another $5,000.00 or so at closing for a $1 million apartment.
Bloomberg just raised property taxes by 7% on January 1, 2009, so make sure you add a higher tax bill on to your budget. As for the property tax abatement that these developers claim is coming your way, DO NOT believe them. The City and State of New York are each in multi-billion dollar deficits that are growing (remember Obama just said on Janaury 6, 2009 to expect "trillion dollar federal deficits for years to come").
Neither NYC or NYS are going to let a single cent of potential property taxes slip out of their meaty little paws. The City and State have complete discretion to cancel the abatements, just like Bloomberg tried to hold back the $400 property tax rebate.
I'm sure the folks who bought these condos in 2007 in the "Fifth on the Park" Sales Office are kicking themselves right now, and thinking of every trick in the book to try to break their contracts.
Oh, and you can forget that 103% loan to value 2-year ARM mortgage you got approved for back in 2007. Stuff has tightened up.
Get ready to put 20% down -- that is $200,000.00 of cash on your $1 million apartment.
And then you got to get approved for an $800,000.00 mortgage, and my sense is that IndyMac is not going to be that impressed that you work at Lehman Brothers and your wife works at Bear Stearns. You'll need to document those jobs with W-2s, not just handwritten scribblings you got at the corner deli.
What I'm saying is there is no way in HELL that these developers are going to be able to bring 160 buyers to the closing table for "luxury condos" in East Harlem next to the projects in 2009.
Folks, this is Great Depression 2 we are talking about here.
Oh you know the best -- the best -- lie that these Futtermans tell about this condo -- and this is priceless -- they say that the developer is going to buy the $3 million penthouse apartment himself, so you can't have it. ROF LOL!
Oh yeah, and the art in the lobby is his and his wife picked out the colors! That kills me! ROF LOL!
This development has 160 market-rate condos (and they are asking a staggering, jaw-dropping $1,000 per square foot which is a patently absurd price for this stretch of East Harlem!), 46 affordable housing rental units which will be owned by the Church which sold the land, a 5-story Church sanctuary, and secure, valet attended underground parking garage.
The Fifth on the Park developers produced 5 videos of "buyers" waxing poetically about the amenities that are offered at the project. The first time we watched the videos it looked like all the "buyers" were paid actors with made-up names, but it turns out, after further research, that they are all real, extremely successful Manhattanites, so go figure. Boy do we have egg on our face!
While it does strain credulity to believe that pre-construction buyers would really sit for video recorded interviews more than a year before the building is built, that is exactly what happened. So I guess only truth is stranger than fiction.
Despite the glowing reviews of these 5 buyers, we always warn NYC condo buyers Caveat emptor: Buyer Beware. You've heard the old joke, "How do you know when the condo developer and the real estate agent are lying? Their lips move."
So, we wrote a little warning essay below about buying a Manhattan condo. It is just like we tell young toddlers: BE CAREFUL!
Buying even a tiny condo apartment unit in Manhattan -- even Harlem -- is outrageously expensive and this Fifth on the Park development is asking prices that are 66% higher than other condos in West Harlem and 100% higher than in East Harlem. So the finished product better be damn good. Damn good.
Remember, if you buy a condo, the City, State and the MTA have some huge cash taxes of about $20,000.00 that they will extract from you at closing (on a $1 million apartment). How much money do you have to make in order to bring $20,000.00 of cash to the closing table. That's right, you have to make $40,000.00 and then pay income taxes and social security on it, so you can have $20,000.00 to pay your real estate transfer taxes on.
If you want an apartment that is bigger than 1,000 square feet in "Fifth on the Park" condos, then the apartment will probably cost more than $1 million, in which case the City and State will extract another $10,000.00 of cash from you as your "Mansion Tax" for your 1,000 square foot "mansion".
Title insurance is another scam -- that'll run you another $5,000.00 or so at closing for a $1 million apartment.
Bloomberg just raised property taxes by 7% on January 1, 2009, so make sure you add a higher tax bill on to your budget. As for the property tax abatement that these developers claim is coming your way, DO NOT believe them. The City and State of New York are each in multi-billion dollar deficits that are growing (remember Obama just said on Janaury 6, 2009 to expect "trillion dollar federal deficits for years to come").
Neither NYC or NYS are going to let a single cent of potential property taxes slip out of their meaty little paws. The City and State have complete discretion to cancel the abatements, just like Bloomberg tried to hold back the $400 property tax rebate.
I'm sure the folks who bought these condos in 2007 in the "Fifth on the Park" Sales Office are kicking themselves right now, and thinking of every trick in the book to try to break their contracts.
Oh, and you can forget that 103% loan to value 2-year ARM mortgage you got approved for back in 2007. Stuff has tightened up.
Get ready to put 20% down -- that is $200,000.00 of cash on your $1 million apartment.
And then you got to get approved for an $800,000.00 mortgage, and my sense is that IndyMac is not going to be that impressed that you work at Lehman Brothers and your wife works at Bear Stearns. You'll need to document those jobs with W-2s, not just handwritten scribblings you got at the corner deli.
What I'm saying is there is no way in HELL that these developers are going to be able to bring 160 buyers to the closing table for "luxury condos" in East Harlem next to the projects in 2009.
Folks, this is Great Depression 2 we are talking about here.
Oh you know the best -- the best -- lie that these Futtermans tell about this condo -- and this is priceless -- they say that the developer is going to buy the $3 million penthouse apartment himself, so you can't have it. ROF LOL!
Oh yeah, and the art in the lobby is his and his wife picked out the colors! That kills me! ROF LOL!
