Maurice Mann insists there was no intention to price residents out of the building to pave the way for condo sales. “Let’s be very clear,” he says. “No one has to leave.” In Mann’s view, the new market-rent pricing is simply “comparable to similar apartments in similar buildings.” The veracity of this statement hinges on Clintonian parsing of the words comparable and similar. One recurring complaint from ex-tenants is that the Apthorp is not, strictly speaking, a luxury building. Its walls are covered with lead paint, its pipe casings bulge with asbestos. Some units have central air, some don’t. Everyone mentions that the water from the Apthorp’s faucets frequently runs brown. It used to be worse, deadpans one tenant: “You’d turn on the faucet and pigeon feathers would come out.” One by one, the wealthier renters did the math and began throwing in the towel. Steve Kroft—one of the few who could, by neighbors’ gossipy consensus, afford the new rent—gave up and bought elsewhere.
Among those who stayed, paranoia began to set in. Longtime resident Ronald Blumer, the co-chair of the Apthorp Tenant Committee, grew convinced that the management employees were spying on regulated renters, secretly sending a representative to the committee’s meetings. (Mann denies the accusation and shrugs off the committee’s very existence.) Some regulated tenants reported receiving mysterious letters from an entity called AJ Clarke Real Estate Corp. offering “mutually beneficial” arrangements on behalf of the management. At least one tenant says she received a “low-six-figure offer,” since withdrawn, to walk away from her stabilized apartment. Mann says that AJ Clarke is a totally unaffiliated “relocation consultant,” but when I asked John Economou, an AJ Clarke associate, about his firm’s relationship with Mann Realty, he told me that was “privileged information.”
Shortly after Leviev bought in, Maurice Mann spent several weeks in Europe. Even that became grist for the rumor mill. “They said it was a vacation,” muses one tenant. “I say he was marketing to the Europeans.” For weeks, the building buzzed with the news that, right after Mann’s return, two or three Brits moved in.
Finally, with the feverish theorizing nearing Roswell levels, came a bit of clarity. On August 28, all tenants were told to report to the building’s famed front gate to receive their copy of the so-called red herring: an offering plan for a condo conversion.
The distribution of the document was cloaked in secrecy. Before touching the book, tenants had to hand over their driver’s licenses for photocopying. Less than an hour after this procedure was over, Apthorp employees began knocking on doors and repossessing the tomes. By the time the tenants got letters instructing them to pick up their copies at the post office instead, people, one renter says, were spooked into thinking it was a ploy to serve eviction notices.
The conversion plan turned out to be a “non-eviction” one. As its front cover plainly states, “no non-purchasing tenant will be evicted by reason of conversion to condominium ownership.” (This calmed some nerves, but not nearly enough. Once the hush-hush distribution of the red herrings was complete, many tenants sent them directly to their lawyers.) The book, which runs 638 pages and weighs almost four pounds, calls for a pricey reimagining of the Apthorp as the new Dakota: an ultraexclusive enclave of the kind it was seemingly born to be, without the hassles of a co-op board. The pièce de résistance is a list of the prices the owners think they will be able to charge after Apthorp 2.0 hits the market in September 2008. The rent-controlled 2J, for instance, is a 3,368-square-foot four-bedroom priced at $8,450,000; right now, it rents for less than $1,000 a month. The stabilized, five-bedroom 5F, at almost 5,000 square feet, is valued at $12.5 million. The two-bedroom 10F is the home of pop singer Cyndi Lauper, who in 2005 won a landmark lawsuit to roll her rent back from $3,250 when she found out the previous tenant had paid $507.85 (the old owners tried an “illusory tenancy” maneuver, renting to an associate who in turn sublet to Lauper at a market rate). The red herring appraises 10F at $6,150,000. The combined purchase price of the building’s 163 residential units is $893,511,750. This makes the price of the average apartment in the Apthorp a little over $5,481,667—and would more than double Mann’s original investment of $426 million. That is, if every apartment sells. Standing between the owners and their windfall is the fact that, even after several months of raised rents, only 27 of the 163 units are vacant—and 96 are, for all intents and purposes, untouchable. If the landlords are interested in keeping any of the current tenants as owners, however, they’re not doing much to reassure them.