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The One That Got Away

Sunday, March 1, 2015
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In the end, it was too good to be true. But we pursued the duplex apartment at 301 East 52nd Street for almost a year anyway. A friend, Roy Kean, became our broker after he found it, and not for a moment have we held it against him—even though the email he sent us a year ago set off a long, frustrating, expensive ordeal. We’re probably lucky we didn’t buy it. But whoever

finally does will likely count themselves lucky as well.


Roy found the apartment by taking a creative approach to the strict and highly unlikely criteria we’d set: We wanted a two-bedroom co-op with at least 1,400 square feet in the Sutton/Beekman area, in a pet-friendly building, preferably one of some distinction. And we only wanted to spend about $1 million. Before we’d sold our last fixer-upper (AVENUE, October 2014), we’d found one that fit our bill of particulars, so we believed another could be found. Sutton/Beekman had fallen out of fashion, as had co-ops. Roy cleverly broadened

his search to one-bedrooms, which was how he came upon the unit Lobby-A, which had been listed for $1.2 million twelve days earlier.


According to the listing, its 1,800 square feet held four rooms, two baths and a fireplace, with a garden and deck outside. It was a “diamond in the rough” that needed only a contractor and a vision to be transformed into “the home of your dreams,” or so the listing claimed. We knew that meant it needed work—a lot—but 1,800 square feet for $1.2 million? Two days later, the broker arranged for a young associate to show it to us, after warning that it had been empty for years and was a wreck.


It wasn’t just a wreck—it was a disaster. The deck had fallen into the garden. The walls and floors showed water damage. The smell in one of the two bathrooms was gag-making, the walls were flimsy, the bedroom subterranean with no windows.


But. It was 1,800 square feet for $1.2 million—and had not one but two freestanding fireplaces. The back wall was all glass doors, and beneath the collapsed deck was substantial outdoor space, maybe 250 square feet, plus another 125 square feet on the deck above, and if you stepped over the jagged, broken boards where it had broken in half, there was a wide path down the side of the building inaccessible except through the apartment, that was perfect for an herb garden. And a quick check indicated that among the neighbors were several doctors, lawyers and executives of JP Morgan Chase and UBS. I’d later learn that before moving to 15 Central Park West, NBC’s Bob Costas had lived there, too.


We returned two days later, and met one of the listing brokers, bringing along a contractor who felt this sow’s pen could be turned into a silken den. Only then did the broker reveal that the owner had sued the building many years earlier, alleging mold infestation and endless construction defects.  The good news? He’d consistently lost in court, and had finally given up and

listed the place for sale.


She did not, alas, add that the litigation was ongoing. I only found that out when I did some research, found the case and journeyed downtown to read the Supreme Court file. Our real estate lawyer, Elliott Meisel, later discovered that it was the second oldest ongoing case in the state court system.  The file revealed that by the time the seller’s second set of lawyers went to court seeking unpaid fees, their paperwork  filled twenty banker’s boxes.


The plaintiff, Colin Fraser, a British-born, Cambridge-educated stamp and coin dealer at a Christie’s affliate, had bought the apartment in 1995. He was its second owner.


The first, a former television executive at MGM, had bought it for $150,000 from the co-op’s developers shortly after its fifteen apartments came on the market in 1979.  The redbrick structure with six big bay windows had first opened in 1931 as the home of the Kips Bay Boys’ Club, dedicated to combating delinquency; its president, Chester Aldrich, was half of Delano & Aldrich, the eminent architectural firm that designed it, as well as the Union, Knickerbocker and Colony Clubs, and homes for John D. Rockefeller, Charles Lindbergh and Otto Kahn. The

club boasted a basement swimming pool, a gymnasium, medical and dental clinics, and a rooftop playground. It had sat empty for years.


Fraser bought the apartment for $260,000 in 1995, and moved in with his four cats and girlfriend, a California lawyer whom he would marry in 1997. By then, according to court documents, the glass rear walls and a glass block wall that let more light into the upstairs were both leaking, as was the apartment above. Soon, problems with windows throughout the building inspired the coop’s board to amend its proprietary lease and make them the responsibility of shareholders rather than the co-op. A former board member says that at the time

Fraser was a member of that board.


The leaks continued for an indeterminate time, and were apparently not fully addressed until 2003. By then, the Frasers had been fighting for years with the board, building management and contractors, whose repairs they deemed inadequate. Shortly after the couple had a daughter in 2001, the family moved out and sued the co-op and its board president, who happened to live right across the lobby, claiming the leaks had caused toxic mold; damage to their floors, ceiling, wiring and a junction box; and worse, neurological, respiratory and dermatological issues for them and their infant daughter (the neurological damage claim was later withdrawn). The Frasers also reported a dozen violations to the NYC Housing Preservation Department and, says the former board member, called the police when an inspector arrived and was let into their empty but locked and alarmed apartment.


To make a very long co-op horror story short, all the mold claims were eventually thrown out of court a er a landmark legal hearing made the case notorious in the New York State court system, as it made mold claims quite diffcult to pursue. The First Department and the Appellate Court upheld the dismissal. But Fraser’s claim that the leaks had damaged his investment stood, and had more than a little basis in fact, as his eventual asking price made clear. The source of at least some mold was the boys’ club’s abandoned swimming pool adjacent to the

rear wall of the board president’s apartment (she would later sell and move away). During the 1978 conversion of the building, debris had been dumped in the pool, which was then walled off. The former board member says the rubble shifted, broke waste pipes and turned the pool into a toxic swamp.


Funds from a sale of the building’s air rights paid to fix both the pool and window problems, but as recently as 2010 the Frasers, in court-ordered settlement talks, were still trying to get the co-op to pay them well over $1 million.  at included forgiving about $200,000 the former board member says they still owe in unpaid maintenance. We assumed that was why our bid to buy the apartment stalled after Fraser accepted our $999,999 offer and issued a contract last spring. Then, we learned he’d also sent a contract to a second buyer, who’d offered the full asking price. Eventually we started looking elsewhere.


“My buyer gave up as well,” says broker Michael Moran, who was recently told, as were we, that a settlement has been drafted and Fraser will finally sell the apartment once the paperwork is signed. Meantime, it had been taken off the market, relisted at $1.5 million, price-chopped to $1.398 million and, most recently, to $1.25 million. Moran says his buyer is still interested. “It’s an amazing apartment,” he explains. “I wanted to buy it!”


So why didn’t a building full of sophisticated folks countersue, or seize the co-op shares for nonpayment and sell the apartment?  The former board member says that the co-op and its board president’s respective insurance companies were only required to defend them if they didn’t retaliate. And why didn’t Fraser sell it a year ago for the proffered $1.2 million? About the only thing that makes sense in this story is that he didn’t get back to me when I called to ask.





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