225 Rector Place

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225 Rector Place, New York City, NY

225 Rector Place
225RectorPlaceNYC.jpg

225 Rector Place in Battery Park City
Building Information
Developer The Related Companies
Architect Gruzen Samton Steinglass
Management Company Related Management
Number of Units 290
Number of Floors 23
Year Built 1985
Construction Method Concrete
Type of Roof IRMA
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225 Rector Place, New York City, NY
Distance to Public Transit Over 30 nearby routes
Region New York City
Municipality New York City
Zoning M2 - 3
Title of Land Condominium


Contents

Background

The financial crisis of 2008 had far reaching and varied repercussions around the world, with nearly every sector of the economy affected to some degree. This was readily apparent in the housing market of New York City, as condominium developers had enjoyed a building boom that had been supported by soaring prices and speedy sales for most of the mid-2000s.

However, when the financial crisis hit in 2008, the housing market seemed to come to a halt almost overnight, and many developers were left with large projects that didn't sell out for years. The list of condominium projects affected by the market’s drop off is long, each with their own story of trying to sell out boom time buildings at post-crisis prices, but no story is quite as tangled and messy as the story of 225 Rector Place. Dubbed the building from hell by real estate commentators, the journey from rental building to luxury condominium was mired in scandal, work stoppages, lawsuits, foreclosures, and a revolving door of developers.

One of the first residences to be built in Battery Park City during its emergence as a residential neighborhood in the 1980s, 225 Rector Place was originally a rental building, but in the mid-2000s, its owners sold the building to developers intent on converting the building into luxury condominiums. A project inspired by the building boom of the time, the conversion quickly became a disaster, involving the foreclosure of the building, multiple lawsuits between the residents and the developer, and at one point things got so bad that the Attorney General had to get involved, and a court appointed receiver had to be brought in to manage the building.

Surprisingly, the building managed to emerge out from under the weight of the negative publicity and has recently been included on lists of the top selling buildings in New York City. With a location that is close to transit and Wall Street, as well as offering both city and river views, it would appear that 225 Rector Place just may well be able to recover from its dubious history.


Location

225 Rector Place is located in the neighborhood of Battery Park City, a planned community found in the southern tip of Manhattan. Once a hub of shipping activity, the area had fallen into disrepair by the 1960s when the shipping industry moved to Port Elizabeth in New Jersey. Plans were begun to revitalize the area, and a proposal was put forth in 1966 to reclaim the land. A master plan was mapped out by 1969, and the project was funded by the Battery Park City Authority in 1972.

The first residential building was built in 1980, and in the three decades that have followed, Battery Park City has seen remarkable growth in both construction and population. The original goal of the community was 14,000 residents, a number well within reach given that a count in 2010 put the community’s population at just over 13,000.[1]

Residents of 225 Rector Place are within walking distance of numerous food and retail options, and car ownership is not required to complete daily errands. Residents are also walking distance to the neighboring Financial District, offering Wall Street employees a short commute, and there are over 30 nearby transit routes.[2]

Construction

225 Rector Place was first built by the development company the Related Companies in 1985. The building was designed by Gruzen Samton Steinglass, and was originally a 306 unit building that stood 23 stories tall. Operating as a rental for 20 years, the Related Companies sold the building to Yair Levy of YL Real Estate Developers in 2005. Levy began plans to convert the building into luxury condominiums. After securing a $165 million loan, construction on the building began, with sales beginning shortly thereafter in June of 2007. At this time, the building was re-branded as Rector Square. Sales were initially brisk, but the building soon ran into problems when the financial crisis began in 2008.

One of the abandoned hallways

Problems stemmed from the fact that the loan that was secured to finance the conversion was made through the Lehman Brothers and Anglo Irish Bank, of which Lehman collapsed and Anglo Irish was nationalized in the wake of the financial crisis. However, the issues with Rector Square went far deeper. It was soon revealed that Levy’s handling of the building’s finances was not proper, nor even legal.

Yair Levy

In early 2009, Anglo Irish sued Levy over back payments on both the initial loan and on accrued interest, and sought to foreclose on the project. At this time it was revealed that the building’s common fund was bankrupt, and residents of the building faced the prospect of being cut off from services, including heat and electricity.

At this point, construction on the project was half finished, but all work had stopped and the developers’ sales office had closed down, leaving residents to live in a virtual construction zone. The residents responded by filing a lawsuit against Levy seeking damages relating to the abandoned conversion project.[3]

Then, Anglo Irish stepped in to pay the building’s management and prevent a utility shut off, although they proceeded with their foreclosure plans. Levy had all but abandoned the building and a court appointed receiver stepped in to manage the building. In response, Levy filed a counter-suit against Anglo Irish in an attempt to block the foreclosure, claiming that the bank failed to adhere to the terms of the original loan.[4]

It was then, Andrew Cuomo, the New York Attorney General, stepped in to sort out the situation and issued subpoenas for the financial records of the building. Legal proceedings dragged on until January 2010 when the court ruled that Anglo Irish could foreclose on the building and YL Real Estate Developers officially lost the building.

Things worsened for Levy when Cuomo filed a lawsuit in June of 2010 against Levy alleging that Levy used the building’s reserve funds as his personal bank account, using millions of dollars of funds to pay off private expenses.[5]

The building eventually went to auction, and the Related Companies re-purchased it for just under $83 million, taking possession of the 232 unsold units. The Related Companies set about finishing the conversion, bringing in interior designer Clodagh to finish the interiors. Sales of the building began again soon after. In January 2013, it was announced that the building, renamed yet again to 225 Rector Place, was over 50% sold.[6]

Things did not end as well for beleaguered developer Yair Levy, as he lost the lawsuit relating to the raiding of the building’s reserve fund and was ordered to re-pay $7.4 million in damages. Levy was also banned from selling condominiums in New York state, a ruling that he challenged, but which was upheld by New York’s Supreme Court in August of 2012.[7]

Layout and Features

Standing 23 stories, 225 Rector Place held 306 units at the time of its conversion, but through combinations by residents, that number is now down to approximately 290 apartments.

These apartments range in size from studios to three bedroom penthouse units and residents had the choice of two different design palettes from which to choose: the Signature and the Metropolitan Collection.

All interiors were designed by Clodagh, a designer known for incorporating the influence of eastern philosophies in her designs.

Indeed, the interiors of 225 Rector Place were designed to adhere to the philosophies of Feng Shui to create a modern Zen building.[8]

Floor Plans

A selection of floor plans is presented.


Amenities

  • 24 hour Concierge services
  • Fitness Center
  • Yoga studio
  • Sauna
  • Steam room
  • Skylit pool
  • Children’s playroom
  • Landscaped rooftop terrace
  • Rooftop cabana with kitchen and dining room
  • Resident lounge in lobby
  • Bike room
  • Laundry facilities
  • Parking facilities

[9]


Bylaws

225 Rector Place Bylaws
Rentals Yes
Pets Yes
Age No


  • This building allows rentals.
  • There are no age restrictions in this building.
  • This building is pet friendly.

Sustainability

To date, 225 Rector Place has not received any LEED certifications and therefore, it is not designated as a green building.

Despite this, should residents wish to help improve the overall sustainability of their building, there are numerous measures they can undertake, including:

  • Upgrading their appliances to more energy efficient models
  • Using sustainable materials when renovating their apartments
  • Using non-toxic and environmentally friendly household products
  • Participating in New York City’s recycling programs
  • Favoring walking or taking public transit instead of using a car in order to reduce their carbon footprint

Trivia

Ken Swig
  • This building was punctured by airplane parts in the immediate aftermath of the September 11th terrorist attacks.[10]
  • Famed author Augusten Burroughs has been a resident of this building.[11]
  • Yair Levy, developer of the failed condominium conversion at this building, made headlines in 2008 when it was reported that he attacked his business partner, Kent Swig, with an ice bucket.[12]


References

  1. Battery Park City
  2. Walk Score
  3. NY Post
  4. The Real Deal
  5. Curbed NY
  6. Curbed NY
  7. The Real Deal
  8. Streeteasy
  9. 225 Official Site
  10. Battery Park City
  11. Curbed NY
  12. Curbed NY


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