Manhattan House Project Gets Green Light

NEW YORK CITY-The Real Estate Finance Bureau of the State of New York Office of the Attorney General has declared locally based O’Connor Capital Partners’ Manhattan House’s offering plan effective. The Attorney General has accepted for filing an amendment to the offering which authorizes formation of the condominium here at 200 E. 66th St.

Thanks to the green light, closing on residences under contract will soon commence. Manhattan House is a condominium conversion project located on Manhattan’s Upper East Side, which was designed by Gordon Bunshaft of Skidmore, Owings & Merrill in 1952. As GlobeSt.com reported nearly one year ago, O’Connor Capital Partners closed on $750 million of senior financing from HSH Nordbank AG, a commercial bank headquartered in Hamburg/Kiel, Germany, money that it is using for the redevelopment or restoration of the landmark building. The building, located between Second and Third avenues, was purchased for $625 million in 2005, and O’Connor plans to invest $1-billion in the conversion.

O’Connor’s capital improvement program will include “all of the amenities, conveniences and services demanded by 21st century lifestyles.” Atop the building will be a private, residents-only club with a rooftop garden and an Exhale Mind Body Spa. For children, Roto Studio has designed a delightful indoor playroom and outdoor play area. The private garden is being restored by renowned landscape architect, Sasaki Associates. Some of the additional new services include an in-residence five-star hotel concierge, private valet parking and in-house valet. Manhattan House sources tell GlobeSt.com that already well over 100 units have been sold.

In January, 2008, in a battle over the rental-to-condo conversion here, 45 tenants of Manhattan House lost their bid to overturn the acceptance of the proposal by the Attorney General’s Office. Finding they had no standing to challenge the conversion plan and that their claims against the attorney general and building sponsors were baseless, a Manhattan judge dismissed an Article 78 proceeding brought by the tenants of the luxury Upper East Side building. “Not only are all existing tenants of Manhattan House not disadvantaged in any legally recognized way should the Plan become effective, if the Plan did become effective, their situation would only improve,” Justice Lewis Bart Stone previously stated.

That lawsuit began after investors N. Richard Kalikow and Jeremiah O’Connor Jr. bought the post-World War II complex in 2005 from New York Life Insurance Co. The building, famous for its white-brick façade, has 575 apartments. Messrs. Kalikow and O’Connor submitted the conversion plan to the attorney general for the 21-story building in February 2006. Tenants received a copy of the noneviction plan, which governs the rights of rental tenants to occupy their apartments after a conversion. The conversion was stalled in April 2006, when Kalikow sued his former business partner, O’Connor, and Douglas Elliman for $75 million plus punitive damages. O’Connor later bought out Kalikow and proceeded with the conversion. At the end of October 2007, after Manhattan House apartments went on the market for upward of $6 million each, the court heard arguments.

According to the Manhattan House website, the condo offers 556-sf studios and up to five bedroom condos that measure roughly 3,327 sf. O’Connor is a privately held investment and development company, which concentrates its efforts on high-quality assets in major metropolitan markets in North America and Europe. Over the past 25 years, the firm has acquired or developed more than $15 billion of property on behalf of various institutional clients and its own account, encompassing all major property types.