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Manhattan Loft Guy

Sep. 27, 2010 - back into the Soho time machine, to Spring Street lofts circa 1972


The History Channel, again
We seem to be in the history cycle on Manhattan Loft Guy, and there is no telling when it will end. Today’s installment wanders back to 1972 Soho, when a few pioneers got together to buy a small building on Spring Street near Greene. At least one set of those pioneers is still living there, still making art there. The Habitats feature in yesterday’s New York Times real estate section has the story: The 3,200-Square-Foot Adventure.

In 1972 ... he was approached by a friend. Would he like to join three families who were buying an old garment factory and converting its lofts to residential space? For a total cost of $146,000, each family would have an entire floor containing 3,200 square feet of space.       


good lawyering = priceless
The NY Times didn’t out them by providing the address (they still live there); I won’t mention the address either. But I know the building, and the four pioneer families may not have budgeted to get much lawyering in that initial $146,000. According to a New York State tax advisory opinion in 1994, the four pioneer families originally owned the building as a simple partnership, each having exclusive rights to reside in their full-floor lofts and each having a 25% interest in the commercial space on the ground floor and basement. This was about as simple a legal structure as could be imagined way back when, and it ‘worked’ for them for 20 years.

They wanted to change the legal structure in 1994, and sought the referenced tax opinion to see if they could avoid capital gains treatment converting from a simple partnership to a two-unit condo, with ground-floor retail as one unit and the 4-unit coop as the other condo unit. (I.e., a true “condop”.) They could. Whew!

Since the partners (now coop owners) retained ownership of the commercial space (now condo unit), they have gotten the benefit of the commercial rental income from the beginning without ever having to worry about 80/20 issues. I don’t know what the rent was like in the early days, but it has been sufficient to cover the coop’s operating expenses since at least the mid-1990s, as the coop owners have a one-digit maintenance expense: $0.

the early days: rats and vagabond living
Pioneering is hard. Each family’s initial investment of $36,500 gave them the right to live and work there, along with the need to fix the place up. Did they move in right away, with rats, broken windows, occasional heat and water? Sounds like it:

Even today, [owner] struggles to describe the chaos that greeted them. Rats scurried about as if they owned the place. Every window was broken. Decades’ worth of lint was embedded in the floor. The rackety boiler reminded [owner] of a 19th-century steam engine. Heat, hot water and electricity were sometime things.

 

***

Sleeping on mattresses and living like vagabonds, the couple gradually transformed the old loft. As an artist, [owner] knew how to work with tools. Together they covered the original floor with lengths of pine and refinished the floor-to-ceiling columns — actually pine tree trunks — left over from the loft’s industrial days. Friends helped patch the holes in the tin ceiling.       

 

In many respects, the undertaking was daunting.       

 

“We had no money,” recalled [owner], who along with his wife was a college teacher at the time. “And we literally had to rebuild the place. But it was very exciting. I think of that period as the good old days.”        


Think about that: these pioneers were essentially repairing and rebuilding their living spaces, while living there among rats and broken windows. That “sometime” electricity, heat and water was the responsibility of the four owners.

Yes, they were the “good old days” in early Soho (even as described by this pioneer), but the sepia tones of memory should not obscure the squalor, or the risks. It sounds as though these two college professors put all of their money into their loft, took on the responsibility of making it habitable, and had three partners to deal with. Among other things, they laid 3,200 sq ft of pine on top of the old garment factory floor.

at least they owned the building
The building was almost certainly not zoned for residential use, and obviously did not comply with the city’s Building Code for residences. It would be ten more years to passage of the Loft Law that gave people who were renting living space in buildings like this legal tenancies, so lots of Soho neighbors in 1972 were facing the same problems as these pioneers (rats, heat, holes) plus the risk that their physical improvements to the space (and sunk dollars) would be wiped out if the landlord kicked them out. (See my September 23 spin through the history cycle, time travel? a first person account of Early Loft Days in New York, for a contemporary account of that phenomenon in a new loft neighborhood.)

limited turnover
It is rather remarkable that two sets of pioneers are still in the building. According to phone, permit and ownership records on Property Shark, the 3rd floor has also been lived in by the same people since the early 1970s.

The 5th floor sold in an estate sale in 1998, for $998,500. The 2nd floor has sold twice: for $1.075mm in 1998 and $4.3mm in 2008 (still in “classic” “raw” condition with one bath). That 2008 sale at nearly $1,350 sq ft raw is a stunning price for a 2nd floor no-amenities coop, even in prime Soho and even one month before Lehman filed for bankruptcy.

pretty primitive, still
The slide show that accompanies the Habitats article in the Times is focused more on the owners’ life, art and furnishings than on the loft, per se. So the several pictures that include the kitchen don’t focus on the kitchen, but on the collections of hat forms or Japanese battle toys, or the columns, or have a deep field (especially in the 1970s, $400 for a Garland stove must have seemed an extravagance). The pix show a still-primitive space, with that pine flooring, simple light fixtures, classically exposed sprinklers and electrical conduit, window air conditioners, and a studio section that puts the “artist” in artist’s loft.

Of course there is no floor plan, but the pix suggest a Long-and-Narrow that is 4 windows wide in front, with the studio in the back getting gentler north light. (The 2008 5th floor listing claims a space that is 36 x 81 feet, with 14 foot ceilings, and windows only north and south.) With no windows on the long sides, flexibility for legal “bedrooms” is limited. (Not an issue for these folks, at least not for the last 38 years.)

it is a small Manhattan Loft Guy world
This post fits within a recent Manhattan Loft Guy cycle touching on the history of loft neighborhoods in New York, as I mentioned up top. Indeed, there were 3 Back In The Day posts just last week. But because the New York loft world is a small world after all (did anyone just start singing??), this post is also related to another recent MLG thread.

This four-unit coop might be the single biggest per-owner victim of the low-life property manager who pleaded guilty two weeks ago to stealing $2.3mm from 19 properties he managed (September 19, thieving coop and condo property manager pleads guilty).  Based on the lawsuit that this coop filed against that bad guy a year and a half ago, this 4-unit coop lost $790,000.

It is a wonder that the owners pictured in the Habitats piece yesterday can still smile after being fleeced of $197,500. Hardy pioneer stock, indeed!

To repeat from my September 19 post’s closing note:

Manhattan Loft Guy note to self: write about how that rippling effect may cause lots of problems between coop shareholders / condo owners and boards, and among shareholders and owners. Soon.


© Sandy Mattingly 2010

 

 

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Sandy Mattingly is Manhattan Loft Guy; now with The Corcoran Group (http://corcoran.com/ ; but see the disclaimer at the bottom of the page), he can be reached most easily at Sandy@ManhattanLoftGuy.com or 917.902.2491, and followed on Twitter @ManhattnLoftGuy (note "mis-spelling"). After 7+ years, the blog has moved. Links here on RealTown will work for the foreseeable future, but new posts (and all the old content) has migrated to ManhattanLoftGuy.com.

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