Six years after banding together and facing numerous challenges, a trio of determined young developers has seen its vision for a former six-story building in the heart of Manhattan’s sought-after Chelsea neighborhood become a reality. The small, 30,000-square-foot structure at 159 W. 24th St. started its life in 1901 as a modest carriage house and stable. As the use of horses waned and the number of automobiles increased, the building became a parking garage in 1917. It remained that way for nearly 90 years, until the neighborhood around it began to change and the owners decided to sell.
When the owners put out feelers for prospective buyers in 2005, developers Eric S. Gray, Joshua Sacks, and Eamon Roche decided the location was too good to pass up, with its proximity to Seventh Avenue, a subway stop, and the city’s first Whole Foods Market. Also working in the building’s favor was the intact condition of its original brick façade, large window frames, and cast-iron columns. “We felt we could reuse the existing structure, which offered a solid shell with 16-inch-thick walls at the base and four courses of brick versus the usual two to three,” Gray says.
After forming New York–based Broad Mill Development Group, the developers purchased the site for $8.75 million in 2006 and named it Carriage House Condominium.
Major Undertaking
Because of the influx of affluent buyers to the area, the Broad Mill trio knew they needed to undertake a major overhaul of the site to transform it into a desirable address. Working with architect Michael Schmitt, also of New York, they played with various layouts in an effort to maximize the number of units, capture natural light coming into the building, and earn a return on their investment. They decided to add two floors to the structure for a total of eight stories—the maximum number feasible for the 43-foot width while still including 24 condos, a shared roof deck, storage lockers, and an enclosed garage for eight cars rather than ground-level retail. “We went back and forth, but we decided the mid-block location wouldn’t work for retail, and that parking would help sell units,” Gray says.
Construction began in 2007 but was delayed when buried gasoline tanks were discovered, then removed. A high water table led to more delays. Work again got under way, and exterior brick was tuckpointed; glass entry doors installed to open the lobby to the street; mahogany garage doors inserted to mimic a barn; new, triple-pane glazing used to deaden noise; and metal, European-style window boxes designed to conceal air-conditioning. “We wanted a modern look with warmth,” Schmitt says. The team also wanted to differentiate the building from all the spare, glass high-rises going up around it, says New York–based interior designer Gustavo Martinez.
Rather than sell units from plans, as many developers do, the partners waited to market the project until the building was almost finished, which they anticipated would be by year-end 2008. “What people find appealing—the moldings and finishes—doesn’t translate in a pre-sales environment,” Roche says. But the delay took its toll.
Financial Meltdown
The investment banking firm Lehman Brothers blew up Sept. 15. In that devastating environment, “it was impossible to give away condos,” Gray says. The bank holding the construction loan, Midfirst in Oklahoma City, started foreclosure proceedings against the building and its developers.
Broad Mill’s lawyers, Hugh P. Finnegan and Karen Kozlowski, partners in the New York office of Boston-based Sullivan & Worcester, offered the developers some key advice: Be forthcoming and patient. “For a lot of new developers, that’s difficult, since their personal finances are on the line,” Finnegan says. “We counseled them to keep the bank informed about how much they were investing and what they were doing to raise funds.” The counselors also encouraged their clients that their market would return and they would retain ownership.
By fourth quarter 2010, the trio reached a work-out agreement with Midfirst. Work was completed, with classy interiors of wide rift-sawn oak floorboards; built-in storage to conceal HVAC units; tall, white, Shaker-style kitchen cabinets with wood interiors; hexagonal gray, white, and aqua marble tiles atop heated bathroom floors; and exposed brick walls and cast-iron columns. Layouts include a range of studios, one-bedrooms, and two penthouses, one of which is a duplex with two terraces and a parking spot.
Despite the difficult national market, sales are moving forward. Since marketing began last June, four contracts had been signed and four were being negotiated as of late August—all within 5 percent of list prices. Outside observer Andrew Anderson, executive vice president at Prudential Douglas Elliman in New York, says, “The garage spaces make the building incredibly distinct for anywhere in the city.” The developers also attribute their success to the building’s quality as well as the scarcity of good building sites and inventory in New York. “People view New York real estate as a safe haven for their capital,” Gray says.
Barbara Ballinger is a contributing writer who focuses on real estate and design.
