Thursday, June 10, 2010

The hidden history of Freddy's: real estate profits not for longtime bar operators but for the flippers--and the developer gaining a zoning override

In the new documentary on the now-closed Freddy's Bar & Backroom--I'll have a review tomorrow before its second showing Friday at 6 pm--manager Donald O'Finn explains how the bar operators tried but failed to buy the building in which they had a lease.

"[Developer] Bruce Ratner owns the buildings that Freddy's is in," O'Finn says. "We had tried to buy it... the price kept going up and up and up. And then it was purchased suddenly by some real estate speculators who then sold it to Ratner."

Really? Yup.

While Forest City Ratner will gain an enormous increase in the land's value thanks to a state override of city zoning, the biggest beneficiary until that sale was not a longtime landowner but an ownership group that flipped the property.

That group made a deal in October 2003, two months before Atlantic Yards was officially announced on 12/10/03. (Word of the project had emerged in July 2003.)

In little more than 16 months, they turned an $850,000 purchase into a $2,825,000 sale.

That's a profit of nearly $2 million.

Comments Eric McClure of NoLandGrab: Let this put an end to any phony outrage about Daniel Goldstein's settlement with Forest City. These vultures got nearly as much almost five years earlier, for a building that Ratner could have actually built around.

(All documents courtesy of the Automated City Register Information System, or ACRIS.)

Back to 1943

The initial document describes the transfer of a property once owned by A.G. Spalding--the sporting goods company that had a factory at 24 Sixth Avenue--to William Henderson in 1943. (The two buildings were not so much a speakeasy but more of a clubhouse for Spalding, according to former Freddy's bartender David Sheets.)

On 3/22/78, the buildings were transferred from Henderson's estate to Frank J. Prial II.
Freddy'sPrialHenderson

A sale in 1980

On 7/1/80, Prial sold the buildings to ex-cop Fred Chadderton--he of Freddy's--for what looks to be a $42,500 mortgage.
Freddy'sPrialChadderton

The bar grows up, and Prospect Heights changes

Property in Prospect Heights began to increase in value in the 1980s and 1990s, as described in this series of New York Times Real Estate section stories.

The most recent incarnation of Freddy's, with the lease owned by Frank Yost and the bar managed by O'Finn, is about 13-14 years old.

Chadderton on 10/7/03 sold the buildings for $850,000 to a trio of owners led by Jason Moore. The transfer was 12/22/03.
Freddy'sChaddertonMoore

The flip

On 2/17/o5, the new owners agreed to sell the properties to Forest City Ratner for $2,825,000. The transfer was 8/10/05. Freddy's still had its lease, but its days were numbered.
Freddy'sMooreRatner

No comments:

Post a Comment