Prisoners of Hudson Street

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Sometime in 1999, Viviane El-Yachar, a broker at Prudential Douglas Elliman, brought her client, Adriaan Van Der Knaap, to 145 Hudson Street. There was a sales office there for a project a few blocks away on North Moore Street, and El-Yachar thought one of the units would appeal to Van Der Knaap, a banker who could spend a couple of million dollars. Instead of being seduced by the North Moore condos, however, Van Der Knaap fell for the sales office itself, or rather the space it occupied—sunny and cavernous, with open views from huge casement windows. “It was exactly what we were looking for,” Van Der Knaap remembers.

He couldn’t live there, though: The building was zoned commercial-only. But he was still on the hunt by the fall of 2002, when 145 Hudson came on the market as a high-end residential project called Skylofts. Van Der Knaap jumped, going into contract for a 4,150 square-foot apartment on the eleventh floor.

Three years and five months later, he hasn’t moved in. Nor has anyone else. The finished lofts sit empty, collateral damage in a colossal misunderstanding among preservationists, the developer, and the city’s maddening process for approving conversions. “I’m always happy when people find their dream home,” says El-Yachar. “But it’s become a nightmare.”

Buying an apartment in New York is so onerous and competitive that buyers almost always end up compromising. Even if you spend a lot of money, you pay too much for space that half-fits your needs; co-op boards pick you apart; and in the case of new condos and conversions, you buy early—the earlier the better—and wait to move in. But even by these standards, the Skylofts debacle is impressive. The drama has played out against the backdrop of a neighborhood cooling toward development as it has grown richer and more coveted, and a bureaucracy that may be overloaded by so much construction. One veteran broker says that the buyers at Skylofts are facing “the longest closing in the history of downtown.”

The green industrial building at 145 Hudson Street went up in 1929. A half-century later, it housed architects, filmmakers, and commercial printers, many of whom clustered in the neighborhood’s solid loft buildings that could support their hulking presses. One of them, Stanley Scott, ran his business there from 1966 to 1991. He bought the building in 1981 and operated it as a commercial property well into the mid-nineties, when he started planning the residential conversion. By then, Tribeca had pretty much arrived, drawing movie stars and well-off families who liked the scale and the hushed nighttime streets. But the northern bit of the neighborhood, which local businesses had renamed Hudson Square, still had a rakish air, perfumed by exhaust from Holland Tunnel traffic. “You could still get rice and beans for $3,” says Rob Rogers of the architecture firm Rogers Marvel, which has worked on the conversion and kept offices in the building.

In 1996, the architect Joseph Pell Lombardi—known for his work on many historic projects—presented his vision for converting 145 Hudson Street to the Landmarks Preservation Commission, which had to approve any changes to the building. The budget was $43 million, and the plans were rather adventurous. Masonry on all the elevations of the building would be repointed, the façade restored, the first four floors sold as commercial condos, and floors eleven through fourteen carved into two gigantic lofts. (Plans for floors five through ten were still undecided at that point.)

Lombardi’s renderings also included a sloping rooftop addition encased in glass. It looked very much like an unbuilt structure—presumably a skylight or greenhouse—that appears in early renderings of the building. In a September 2002 New York Times article, the then-chairperson of the Landmarks commission, Sherida Paulsen, said it “echoed the original design.” Lombardi remembers being asked how noticeable the penthouse would be, “and I made the statement that it would have minimal visibility or low visibility” from the street.

The issue of its visibility “wasn’t a major part of the presentation,” he says. At the time, penthouses were mushrooming on the rooftops of Tribeca, many of them less attractive than Lombardi’s. Besides, architects couldn’t always accurately determine how penthouses would look from below; they didn’t yet have the technology to produce visibility studies, and actual mock-ups providing precise sight lines cost tens of thousands of dollars to build. (Landmarks didn’t require them then; it does now.) In any case, Lombardi’s drawings were filed and “perforated” (Landmarks-speak for approved) in early 1997. The developer and architects got an okay from the city—the building was in an area zoned for manufacturing so it needed dispensation—and the conversion was on.

The luxury market was hobbling when 145 Hudson made its debut in October 2002. Though business in proletarian apartments had bounced back nicely after the 9/11 attacks, the high end had been slower to return, as buyers waited to see what would happen. So it came as a relief to co–listing broker Sean Murphy Turner of Stribling Marketing Associates when about 100 real-estate agents, eager to see what was available, swarmed the Skylofts sales office when it opened. There’d been lots of buzz about the conversion; many agents had been in the building and knew it was absolutely prime space. “I’d never seen an open house when there were so many brokers on the phone to their clients,” marvels Turner. All eight of the available units sold immediately, most at the asking prices, from $3.45 million (for 4,120 square feet) to $4.4 million (for 5,198 square feet). There’d been a concern that the lofts were too big, says Rogers, but buyers—including Adriaan Van Der Knaap—weren’t scared off.

Leonard Steinberg, El-Yachar’s colleague at Elliman, has two clients who bought in the building. “We were told we would close in four or five months,” he says. “We weren’t given a particular deadline,” agrees Van Der Knaap. “There was a general understanding that certain things needed to be finished but that it wouldn’t take long. We were told a couple of months, basically.” Then came the first delay: All the new windows the builders had mounted—single-glazed, in keeping with what was there before—needed replacing. They were leaking, really no better than the originals, and the contractor had to install a stronger, better alternative made from aluminum that conformed to Landmarks’ standards. The buyers were understanding: “We thought, That’s a good reason to be late,” says Steinberg. Then, more holdups materialized: “It always came down to ‘We had to get Buildings approval on blah blah blah,’ so it was delayed another four months, another four months, another three months.”

From here, the story becomes a Gordian knot, and it’s tough to tease out what happened when. But it appears that all work stalled in 2003. A couple of buyers walked. David Yurman, the jeweler, was rumored to be in contract for the thirteenth floor but finally let the deal go. (Yurman’s representative had no comment.) Still, most everyone, including Van Der Knaap, hung on.

Landmarks thought it had approved something far more modest than the 20-foot-high penthouse that had been built.

The problem was the penthouse. Somewhere along the way—and when exactly this happened is debated—it appeared to grow from thirteen feet high to twenty. The building’s mechanicals—vents, flues, pipes—were also replaced and moved to the top of the addition; recreation space, per the City Planning Commission, was also added. At an April 2005 Landmarks meeting, Rogers Marvel (soon to become the architect of record; Lombardi says he had long since moved on to other projects), represented by principal Jonathan Marvel; Scott’s lawyer; and the buyers and their brokers attempted to hash the whole thing out.

According to the transcripts, the commission appears to have believed that it had greenlighted something more modest than the twenty-foot-high penthouse that had actually been built. (The panel was largely made up of new members, though some had been at Lombardi’s presentation in 1996.) Robert Tierney, now the head of Landmarks, says today, “It was never approved by the commission at twenty feet.” But at one point in that transcript, commissioner Richard Olcott comments, “How it got from thirteen to twenty feet is a mystery, and it got overlooked and approved mistakenly. And that’s very unfortunate.” (One plausible scenario has the modified plans slipping through a review by junior staff members at Landmarks.)

Lombardi attributes the confusion to “a change in mind-set. If you stand in the square and look around the buildings, the other additions are highly visible. They very much stand out.” Turner agrees: “These penthouses—none of them are in keeping with a Landmark look, but they were all approved.” Van Der Knaap, who was at the meeting, doesn’t understand why Skylofts wasn’t. “I thought Landmarks was always about beauty, about improving the neighborhood. I come from Amsterdam, where buildings are, like, 400 years old. You can paint a window and you don’t have to go through all of this … I would’ve expected that discussion to be, Does it look good? Is it in line with the character of the building?” On this subject, Tierney would say only that his group looks at “appropriateness.” What does that mean, really? Come to think of it, what did “minimally visible” mean in the first place? The whole imbroglio could well hinge on nothing more complex than semantics.

Or perhaps times have just changed. When Skylofts was approved, says another source close to the situation, “we were revitalizing buildings during a recession. But this has just taken so long, and Tribeca is now supersensitive… . One set of commissioners was comfortable with one set of aesthetics, and another was stricter.” Some say Scott, for whom Skylofts was a first project, may have found himself in over his head. “Larger entities would’ve been in and out,” says an insider. (Calls to Scott’s office were referred to the broker.) Marvel, for his part, refuses to blame Landmarks. “We had a challenging project with a lot of moving parts,” he admits. “It’s the extra complexities of conversion.”

A longer view suggests that this story could be a sign of things to come. Several other Manhattan projects—including conversions that may not easily meet Landmarks’ stringent requirements—are moving far more slowly than has been typical. “Red tape exists on all governmental levels, particularly with this boom,” says a source in the development business. “Landmarks has doubled the amount of projects it needs to review, but it has had the same budget for ten years.” Tierney flat-out denies that Landmarks is overburdened, but he will acknowledge that he’s inherited a tangle: “A lot of [this] was before my time … I’m just picking up, trying to make something work here—we did make it work.”

In the end, the penthouse will be dismantled to make way for an acceptable—that is, less visible—replacement. “It’s going to be magnificent,” says Turner, adding that the architect James Carpenter, known as one of the great glass guys in the business, is overseeing the redo. That’s cold comfort to brokers who’ve been waiting years to collect their commission and whose clients are stuck. (The commercial tenants weren’t affected and have been settled in for years.)

One woman was pregnant when she and her husband went into contract, and now the baby’s a toddler; the plans Van Der Knaap paid an interior designer to draw up may no longer work, as his family’s needs have changed. “To keep an entire building [waiting] … I’m not buying for the roof terrace. If I had to wait three years to use the roof terrace, I wouldn’t care,” he fumes. He’s even more steamed at the suggestion that he shouldn’t complain, given how much his property has appreciated. (It’s easily worth $5 million now, and some suspicious types involved in the deals even think the developer would be happy if they walked, since the units could be resold for far more money.) “Since values have gone up so much, there’s no way we can say no to this and turn around and buy something similar,” says Van Der Knaap. “We’d have to pay more for it. It’s like golden handcuffs.”

As of now, nobody will say when he can move in. Turner says “by May”; in January, buyers got their closing dates, which were then postponed; the same thing happened in February. “The last [we heard], they needed one or two more inspections. I have no clue what those are. It’s just words,” laments El-Yachar. So why wait? “I shouldn’t sing too much praise [but] … I love the space,” says Van Der Knaap. “Whenever we had doubts, we’d go over,” says Glenn Norrgard of Sotheby’s International Realty, “and as soon as the doors opened and we walked in, the sun would be flooding in through the windows and [my clients] would fall in love again.” (Norrgard has two buyers in the wings.) Steinberg tells a similar story. “When I take people there and we get into the elevator, I tell them, ‘Be prepared. It’s going to be an emotional experience.’ And they think, Broker. Then we get [in] and they gasp, ‘Oh. My. God.’ … I’m so angry about this deal, but when I go into the building, I forget everything. It’s that beautiful.”

Prisoners of Hudson Street