By Michael Idov Published Mar 30, 2008
It’s a 46-story skyscraper being built on a graveyard that’s brought together shadowy Russians and a billionaire brand name to attract internationals in a zoning-skirting scheme that’s enraged the neighborhood, sent glass shattering to the street, and killed a construction worker. It’s New York in the aughts, and inside there’s a luxury suite just for you. CLICK IMAGE for direct link to story.
It looms over the neighborhood like a monolith, dwarfing everything for blocks around. Its boosters see a gleaming shrine to luxury and prosperity. Its opponents see an eyesore, a middle finger, or, in their angriest hours, even a tombstone. Stealthily conceived to dodge local zoning laws, and approved amid paroxysms of protest, the soon-to-be-46-story glass-and-steel tower isn’t even finished yet, but it has already amassed a dark history. During the course of its breakneck-speed construction, the bones of what may be nineteenth-century slaves have been discovered at the site, alleged Mafia ties have come to light, a worker was killed when a shoddily built wooden mold gave way, and a poorly secured panel of glass blew off the building and rained shards down on the sidewalk. Its developers make up a sort of cartoon of New York money in 2008: a pair of nouveau riche, real-estate-mad Russians and their garrulous, compulsively self-promoting American partner. It is called Trump Soho, and even if you shudder at the meeting of these two words, somewhere deep in your subconscious, you probably saw it coming.
Look out any window, and it’s plain to see that the city is in the middle of a historic building boom that appears to have outlasted the economic one. Amid all the tumescent towers shooting up around town, a Trump-branded building in the heart of Soho might not have the grand, city-altering impact of, say, Atlantic or Hudson Yards. Its symbolic weight, however, may be even greater. It’s not just that Trump has deposited himself into a previously squat neighborhood that traces its very origins to having successfully kicked out Robert Moses. It’s that the troubled history of the building itself seems almost a Victorian parable about twenty-first-century development in New York.
In its previous incarnation, the site was home to a parking garage—another square container in the land of square containers, on the corner of Spring and Varick Streets, just west of Sixth Avenue and hard against the exit and entrance ramps of the Holland Tunnel. Then along came Rudy Giuliani, plummeting crime rates, and a booming economy, and the lot was snapped up by Crescent Heights, the self-styled “premier condominium company” that specializes in building high-rises in “the nation’s most exclusive urban enclaves.”
This particular urban enclave wasn’t, in fact, Soho. It was just west of Soho, in a micro-neighborhood recently rebranded by real-estate agents as Hudson Square. And it certainly wasn’t exclusive. There was a Manhattan Mini Storage across the street, a UPS hub around the block, and no high-end apartment buildings in sight. Most services were a brisk walk eastward, and pollution from the tunnel traffic made neighborhood asthma rates worse than those in the South Bronx. But that was only one of the hurdles Crescent Heights would face in building condominiums there. Legally speaking, it simply couldn’t be done. West Soho is zoned “manufacturing,” a remnant of the bygone era when the neighborhood hummed with printing houses and wasn’t considered suitable for people to live in. Crescent Heights had devised a novel way around all that: a plan for a “condominium hotel,” in which buyers would own their apartments but stay there for only a few weeks a year. The rest of the time, their apartments would function as hotel rooms: “Transient hotels,” with no full-time residents, were legal under the zoning code. Still, the gambit would be tricky to pull off—it had never been done in New York—and Crescent Heights put the lot back on the market in 2005.
That’s when the Kazakh and the Georgian arrived. Tevfik Arif had gotten his start in the business world at the Soviet Ministry of Trade. After the fall of the U.S.S.R., he reinvented himself as a successful hotelier in Turkey, catering mostly to wealthy New Russians. With his gangling frame and burnt-sienna tan, he had recently become a fixture on the Cipriani circuit. Arif’s company, Bayrock, wanted to develop the lot but needed an equity partner. Arif tapped a friend, Tamir Sapir, born Temur Sepiashvili in Georgia and likely the richest ex-Soviet in the U.S. His Sapir Organization, now headed by his son, Alex, already controlled over 7 million square feet in Manhattan, including 2 Broadway and 11 Madison. On September 21, 2005, the partners closed the deal on the lot.
Alex Sapir concedes he didn’t at first understand the idea of the condo-hotel—“just like a lot of people don’t understand it now,” he says. But he came to see its promise. “I think it’s a great product for certain cities,” he says. “Probably five cities in the world.”
Arif and Tamir Sapir both happened to know one of the few big Stateside developers to have successfully carried off this business model. Sapir makes his home in Trump Tower, and Bayrock has its offices there. Their courtship of Donald Trump was by all accounts a layup. Trump already had similar projects under way in Chicago, Las Vegas, and Dubai, among other places; New York was an obvious brand extension. “Tom [Tamir] and Alex came to us with a complete proposal. We looked at it, and we loved it,” Trump says. In 2005, Trump signed on. He says he’s a full equity partner, which is a rarity: These days, he mostly licenses his name out to third parties for an 8 to 15 percent cut.
Trump Soho would be the first new five-star hotel downtown since the Ritz-Carlton opened near Battery Park in 2002, and the first one ever in Soho. In some ways, the project would be vintage Trump. For one, it would be tall. Very tall. Taller, notes Trump’s daughter and business partner Ivanka, “than everything else in the area by a factor of four.” The neighborhood’s zoning rules allow a building’s total floor area to be up to ten times its lot area. Taking advantage of various loopholes (buying the air rights to a neighboring building, earning a bonus for adding a public plaza), Trump and his partners jacked up that ratio to 1:12—and managed to squeeze 42, 45, and finally 46 stories, or 405,000 square feet of floor space, out of a 34,000-square-foot lot. There would be no architecturally forward design: It would be a simple, approval-friendly box, the way Trump likes it. “In New York,” he says, “I can build a box as-of-right [within existing regulations]. Or I can get a creative design, go through ten years of community boards, and still get refused 32 to zero. Given that choice, I’ll build a box.”
In other respects, however, the usual gold-plated, logo-besotted Trump template would have to be tweaked. This was, after all, Soho. And so Ivanka and Trump’s son Don Jr. were brought on to act as liaisons to the “younger, hipper,” in their words, demographic. The lobby would be designed by David Rockwell, the restaurant run by Laurent Tourondel (when Tourondel pulled out, Alex Sapir signed a deal with Quattro, the South Beach Italian hot spot). Trump Soho’s magazine ads would feature Ivanka elegantly falling out of a cocktail dress, under the tagline “Possess Your Own Soho.”
Not that the world knew anything about any of that for some time. Trump and his partners initially guarded the project closely, presumably for fear of raising opposition. Then came the final installment of the fifth season of Trump’s reality series, The Apprentice. After a bloated setup larded with cameos by Michael J. Fox, Jaime Pressly, and the Barenaked Ladies, the contestants were herded onto the stage of the Orpheum Theatre in Los Angeles for a live broadcast of the final judgment. As the main prize, finalists Sean Yazbeck and Lee Bienstock were given a choice between working under Trump on “a hotel project in Hawaii and a hotel project in New York.” The episode aired on June 5, 2006. It was the first public reference to Trump Soho.
“We went for the permits in a very low-key fashion,” Donald Trump told me when I asked him how he managed to smuggle a skyscraper. “Once we got them, we announced.”
That’s not exactly the way it happened. The Department of Buildings granted the first permit for the lot three and a half months after the broadcast, and wouldn’t fully approve the building for nearly a year. At issue was not the blueprint but the purpose. Apparently thrown by the condo-hotel concept, the DOB required Trump and his partners to revise their application eleven times. Finally, the city granted them a limited permission to excavate the lot and put in the foundation—but nothing more—in late September 2006. The Apprentice tie-in appears to have had two goals: to generate free publicity for the building, and to make it appear inevitable.
Once he grasped the scope of the project, no one was more outraged by the news than Sean Sweeney, the director of the Soho Alliance. Sweeney’s group arguably created Soho as we know it, by pushing for “artist zoning” in the seventies and coining the very name “Soho” at its inaugural meeting. A slight and excitable man in wire-frame glasses, Sweeney occupies a Greene Street penthouse crammed with custom contemporary furniture and leads a life seemingly devoted to squashing out-of-context construction. “In 1990,” he says, pointing out the window and across West Broadway, “they wanted to build a hotel there. I said, ‘Hey, you’ll ruin my view!’ We fought, and it stayed an empty lot for twelve years.” The building that finally did go up is a modest-size condo, with a politely recessed top story. Trump Soho stands a few blocks beyond, splitting the sky in two.
Sweeney rallied other downtown groups, got the zoning-committee chairman at Community Board 2 to pledge support to the cause, and launched an aggressive campaign against the invader. He likes to frame his opposition to Trump Soho in vintage class-warfare terms. “We didn’t fall off the pumpkin truck. He moved into the wrong neighborhood. We’re a phoenix, and Trump is a vulture,” he told me. Sometimes, though, his civic outrage crosses over into a more particular anti-Trump animus. Never mind that a number of other large-scale projects are already under way or being planned nearby. (The “manufacturing” designation, which allows hotels but not condos, has done precisely the opposite of what it was supposed to do. Within blocks, five hotels are being built right now, and six more are being talked about.) Sweeney seems more intensely alarmed by the brand, and the people it attracts, than anything else. “We don’t want airline hostesses here,” he says, “or people coming from Europe or Asia for a couple of weeks. Who was the first buyer in that building—a Croatian-Swedish soccer player? Trump represents everything we hate. Bad taste. Déclassé. He’s uptown, we’re downtown, and never the two shall meet.”
On the mild Monday afternoon of December 11, 2006, excavation was proceeding apace when one of the cats abruptly stopped digging. A small cluster of hard hats gathered. Peering into the pit, the workers could plainly see a violated grave: skulls, ribs, vertebrae, right there under the excavator’s claw. The bones were found in the northeast corner of the pit, where an African Methodist Episcopal church had stood until 1963. They could have belonged to slaves or abolitionists. Another, since discarded, theory was Mafia hit victims—there used to be mobbed-up social clubs on the block, and the church itself vanished in what came to be seen as a suspicious fire. Either way, eerie forces had manifested themselves. The police were called, and the spooked crew retired to the Starbucks across the street. The next day, the city issued the first of what would be several stop-work orders for the site. Andrew Berman, executive director of the Greenwich Village Society for Historic Preservation, quipped to the New York Sun that Trump ought to rename the project “Trump Condo Hotel and Mausoleum.”
The developers, trying to show sensitivity, hired an archaeologist to monitor the site. But a month later, the Department of Buildings sent their application back again. The bones weren’t the issue. The city still wasn’t convinced that Trump intended to use the building as a hotel and not condominiums. “They’re not fooling anybody,” Borough President Scott Stringer told the community newspaper The Villager. The real-estate blog Curbed.com started using the designation “Trump’s Hole” for the stalled project. Murky water began pooling in the pit.
On May 2, Trump and his partners tried a new tactic. At the request of Stringer and City Council Speaker Christine Quinn, they filed a “restrictive declaration,” promising, in writing, to use the building as a hotel and not condominiums. Under the purported guarantee, no unit would be occupied by the same person for more than 29 days in any 36-day period, or for more than 120 days a year. The project’s opponents insisted they were being fleeced. “I think there’s a wink-wink-nudge-nudge thing going on,” Sweeney says. “These types of things are routinely fudged.” Besides, Berman says, the condo-hotel rules would be impossible to enforce. “Supposedly, the developer will be telling the Sultan of Brunei or Madonna or whomever, ‘Your 29 days are up!’ It doesn’t pass the laugh test.”
The city, however, acquiesced. Late on May 7, 2007, the DOB finally approved the application. “We’re assuming the beams started rising at dawn,” deadpanned the gadflies on Curbed. They had no idea.
Trump and his partners began putting up the building with maniacal speed, determined, it seemed, to bully it into existence. The cellar-floor slab was done by the end of June. By September, the tower began to rise. The Soho Alliance filed a legal appeal trying to make the city rescind its permit, but the higher the building rose, the more quixotic the effort seemed. “In our wildest of dreams,” Berman says, sighing, “they’ll say, ‘Well, we have to tear the thing down.’ ”
On September 19, Trump held a press conference in the hastily red-carpeted, open concrete maw of Trump Soho’s ground floor, to claim that the building’s 400 units had received a staggering 3,200 applications. Sweeney and Berman organized a protest. A few funny signs (don’t comb over here) made the news, but they seemed absurd next to the building itself—obviously present, obviously there.
Trump’s view of the demonstration was clear. “I want to thank all the protesters outside for making this project so successful,” he quipped. He also announced that the building would add another floor that would house a members-only lounge called SoHi. A more gleeful fuck-you to the preservationists was hard to imagine.
The mob ties came to light on December 17, when the Times published a pointed profile of 42-year-old Felix Sater, a no-title principal in Bayrock. Like Tamir Sapir, Sater was a Russian immigrant with family and business roots in Moscow. The story outed Sater (who had added an extra “t” to his name, perhaps trying to avoid precisely this kind of disclosure, and now goes by Satter) as an ex-con with possible Mafia connections. In 1991, as a twentysomething hotshot broker at Bear Stearns, Sater had apparently gotten into an argument with a colleague at a Mexican bar. He resolved the dispute by smashing a margarita glass and using the broken stem to stab the other broker in the face. He spent a year in jail for assault.
The Times article also identified Sater as a player in a pump-and-dump stock scheme, and claimed he had secured mob protection for the scam. In 1998, investigators looking into the operation had searched Sater’s locker at a Manhattan Mini Storage—across the street from the future Trump Soho site—and found three guns and offshore-bank-account papers. Sater promptly fled to Russia, eventually returning to New York, where he helped build cases against nineteen other men involved in the matter. He got off as an unindicted co-conspirator, the Times noted. The paper made a point of connecting Sater to Trump in the headline (“Real Estate Executive With Hand in Trump Projects Rose From Tangled Past”) and claimed that Sater saw Trump Soho as “an emblem of his new life.”
Alex Sapir swore in the Times story that it was the first he’d heard of Sater’s criminal past: “This is all news to me,” he said. Given the tight circle of Soviet-born real-estate players in New York, that’s hard to believe. There’s also a curious link between Tamir Sapir and Sater through a Gambino-family soldier named Edward Garafolo, who, according to separate indictment papers cited in the December 17 Times story and an earlier Times story about Tamir, collected money from one and tried to shake down the other at virtually the same time in the mid-nineties. Trump, for his part, calls the Sapirs “great friends” but avoids any mention of Sater, whose company is involved in at least four other Trump projects.
In 2006, there were eighteen construction-related deaths in New York City. In 2007, there were twelve, and this year is off to a terrible start: eleven deaths in just three months, seven of them coming at the March 15 crane collapse at 303 East 51st Street. The rise in fatalities has been attributed to the large increase in construction projects and the speed with which they’re going up, of course, but also to Bloomberg-era cutbacks in the number of building inspectors. The boom has had a steep cost.
The death at Trump Soho came on January 14. That morning, one of the project’s 600-member crew, Yuriy Vanchytskyy, a Ukrainian construction worker from Greenpoint, showed up at the site at his usual 6 a.m. He was laboring near the top of the building around two o’clock, preparing to pour concrete into a wooden mold that doubled as a makeshift floor, when the structure gave way, sucking Vanchytskyy and another man into a downpour of debris and wet cement. The more fortunate of the two workers got caught in the netting two floors below and survived. Vanchytskyy was thrown past the net and plunged 42 stories, his body landing on top of the building’s jutting second floor. The fall decapitated him.
Before EMS and fire trucks swarmed the scene, shaken co-workers lowered the unconscious survivor to the ground with a crane, using the debris bucket as an improvised stretcher. Then they went up to the second-floor ledge and covered Vanchytskyy’s body with a tarp. Amid renewed protests, the city shut down the site for the second time. “This is what we get when they make us rush the job,” a worker told the Daily News.
The contractor, Bovis Lend Lease, had previously been involved in the protracted and disastrous disassembly of the Deutsche Bank tower near ground zero, stalled since the deaths of two firefighters in an August 18 fire. Now Bovis faced a new round of scrutiny. After forensic engineers established that the wooden forms that held the concrete failed to meet industry standards, newspapers began receiving tips laying the blame on Bovis’s concrete subcontractor, DiFama, whose co-founder Joseph Fama is a Lucchese-family associate, currently serving a 50-month jail sentence for racketeering. Fama officially divested himself of the company, according to a Timesstory about the accident, but is believed to retain a hand in it. Bovis has a long history of safety violations—it paid over $71,500 in fines in the past three years, including for seven separate violations of fall-protection protocols.
After an inspection of the site by the Department of Buildings, work resumed at Trump Soho on February 21, with Bovis and DiFama still on the job. Two months later, on a windy Saturday in March, glass panels came crashing off the tower’s side and shattered on the sidewalk, shutting down the block. Perhaps the ghost of Jane Jacobs was monkey-wrenching the project. But this time, the ensuing outcry had an almost perfunctory air to it. Bovis got slapped with another violation, and the workers were back within days. Before the month was over, another Bovis crane collapsed, in Miami, killing two. Days ago, the DOB, newly vigilant about cranes after the recent midtown collapse, inspected Trump Soho’s and found hairline cracks and a broken beacon. Yet another stop-work order followed, but it’s unlikely to last. “It seems like no matter what happens, [the project] at most just gets a temporary delay,” says Andrew Berman. The previous manic dash put the tower so far ahead of schedule that all the stop-work orders simply brought it in line with original expectations. Alex Sapir still projects it will be done by the spring of 2009.
Lately, it’s been rumored that Trump himself, fed up with the ugly publicity, has begun downplaying his connection to the building, and even put out feelers to potential buyers (he denies that). But Trump Soho, at this point, is bigger than Trump. Like a creeping kudzu, like the villain rising from the bloody bathtub, it keeps coming back.
Who’s going to live in Trump Soho? Unsurprisingly, between 55 and 60 percent of the buyers to date, according to Trump, are foreigners, mostly from Latin America (a source in the Sapir organization says at least five Moscow business types have bought in, too).
The condo-hotel model where every room does double duty is a first for these parts. It has a few quirks. Trump Soho unit owners won’t get to put in their own furnishings (Fendi will, complete with the interlocking F logos on the rugs) or hang their own artwork (it will come from a rotating in-house collection). They won’t even get their own keys; the front desk will handle every check-in and checkout. One privilege an owner will have over a guest—after forking over $3,000 per square foot, or more than $2 million, say, for a 682-square-foot unit—is the ability to kick the guest out. Should one require one’s “room” on short notice, the management will relocate the guest to a similar unit. Owners also get a secure master closet to hang a few suits in. But “Possess Your Own Closet in Soho” would probably lack the original slogan’s punch.
To better understand this sales pitch—and to see if Trump is, indeed, peddling a condo in the guise of a hotel—I decided to kick the tires on one of the units myself. One day in late February, I assumed the persona of a wealthy Russian, which I achieved by thickening up my native accent and pairing a loud Richard James shirt with a louder tie. Right away, there was a bit of a velvet rope. I had to submit my information on the Trump Website and wait to be summoned to the sales office.
The process was not without kinks. A woman based in Miami contacted me and said she’d e-mail me my appointment details. When that didn’t happen in three days, I called Prodigy, the Trump Soho sales agent (“For New York, press one. For Panama, press two”), and, with some difficulty, wangled the address.
The sales room was not quite there yet. There was no model bathroom, a huge selling point (many units will have windows over the tubs, among other seductive touches). The developers, I was told, were waiting for a load of Italian marble to come in.
A woman named Sandra, all business, tan, and plunging décolletage, gave me an overview of the building. When I started getting whiny because I said I wanted to spend “autumns” in New York and that the 29-day rule bugged me, she began by suggesting that I could move to another unit for a week, for which I’d be charged the lowest possible rate (while my own room is possibly being rented out at a regular rate—profit!), then triumphantly switch back for another 29 days. I wasn’t sold. Then Sandra suggested a loophole. “If you buy in your name, the use is limited to you, your spouse, and your closest relative. But if you buy in the name of a corporation, you can check in and out colleagues, employees, clients … ” She stopped just short of saying that I could arrange a year-round stay by rotating my own aliases. But it seemed to be implied.
At this point, Amy, an even tanner woman with an even lower-plunging décolletage, took over and shifted the pitch from leisure to business. Most people talking about Trump Soho assume that it will attract the kind of nouveau riche buyer that has only recently learned the phrase “Money is no object” in English. But to my surprise, the hotel is actually being marketed as an income opportunity for the striving buyer. Trump Soho’s killer app, I’m told, is a computerized system “designed to fairly and equitably allocate reservations among participating units,” which means that the rooms that are most “owed” reservations get rented out first. Amy works for Sapir, but there are two other third-party companies you can use to rent out your room; the only thing you can’t do is sublet it yourself.
Amy is not at liberty to say how much the hotel will charge its transient guests, but she says the rates will be “comparable to Mandarin Oriental’s.” (A person familiar with the Sapir Organization says the rate may be as high as $900 per night for a studio.) She then handed me a worksheet that would allow me to calculate my own revenue.
As an investment, it turns out, a unit in Trump Soho leaves a lot to be desired. One would think that the whole point of owning a hotel room would be free room service and such. Not so. When you occupy your own unit, just about every amenity is subject to a separate charge. When you’re renting it out, a blizzard of other fees (rental-program administration fee, credit-card fee, reservation fee, per-use fee) kick in. The furniture and fixtures require their own reserve fund to finance replacements, should I rip a Fendi rug with a Fendi chair leg, say. Oddly enough, mandatory contributions to the fund tick up as the furnishings age: 2 percent of the unit’s gross revenue for the first year, 3 for the second one, and 4 percent from there on.
I dutifully work the worksheet, using Room 1505 (a “studio suite” with a partially obstructed view) as my test case, and making the assumption that I’d keep it for myself 100 days a year, renting it out the remaining 265. I go with the optimistic-sounding $900-per-night figure and New York City hotel-occupancy rate for 2006, which was a healthy 85 percent. My gross revenue from the unit would be $202,725 a year. Not bad. As soon as I plug in the charges, fees, and fixed costs, however, that number dwindles to a net income of $76,049.37: a wan 3.9 percent return on an investment of almost $2 million, using the most favorable assumptions.
Seen from the developer’s side, however, the gambit is ingenious. On “my” room, the fees alone put over $40,000 into the hotelier’s pockets—not counting the overhead and operating common charges, which add up to another 60 grand. In other words, if you think of Trump Soho as a hotel, it’s a hotel with rooms that essentially come presold for half a year every year; if you think of it as a condominium, it’s a condominium where each unit can be sold twice.
Ask Trump how the project is doing, and be prepared to hear that everything is splendid, record-setting, yooge. In late March, a Trump representative told me the building was 60 percent sold. The availability papers I obtained, however, show less movement: In November 2007—four months ago—contracts were out on just three out of the 37 units on the list. The same document for the end of February 2008 showed five contracts out, and two of the three units spoken for in November were back on the market.
Still, as befits a high-profile project, the prices have been bumped up once already: 1505, my test unit, was $1,848,000 in November. Now it’s $1,941,000. (Of course, the saleswoman immediately promises to give me 2 percent off.) That’s $2,846 per square foot. When the penthouses get released, their prices will hover around $5,000 per square foot, which promises to trigger a top-down price hike on the rest of the floors.
As her final move in the client’s seduction, Amy had an idling Bentley pick me up and whisk me to the construction site. (“And drop you off anywhere you’d like.” Greenpoint?) The driver, Vlad, was a gruff old Russian with a jailhouse-style Cyrillic V tattooed on the back of his palm. He too worked for the Sapirs.
The Bentley slowly circled the block. Across construction-ravaged Spring Street; down exhaust-choked Varick, where Camrys and Econolines waited their turn at the filthy mouth of the tunnel; east on half-demolished Grand. It was 3 p.m., and the Trump Soho construction workers were leaving their shift. They were eyeing the black, shiny, scarablike luxury sedan with heavy stares.
“I heard one of ours died here,” I said to the Bentley driver, keeping up the Russian-businessman charade for no particular purpose. “Yuri or something.”
“Ukrainian,” Vlad corrected me testily. “Well, shit, things happen. What are you going to do, stop building?”