Selling Real Estate to Leibovitz "Big Mistake"

by Tom Johansmeyer (RSS feed)
Aug 10th 2009 at 7:04PM

Celebrity photographer Annie Leibovitz may lose her two high profile properties if Art Capital Group wins its $24 million lawsuit. They are side-by-side in Greenwich Village and date back to the 1830s. Leibovitz's plan was to combine 755 Greenwich Street and 757 Greenwich Street into a single 9,000 sqft life/work space. These plans, of course, are in jeopardy, and the former owner of the Greenwich Street homes, Jay Furman, partner in FYH Village LLC, is calling the sale a "big mistake."

The renovations have taken years, resulting in legal action from the Greenwich Village Society for Historic Preservation and a $15 million lawsuit against Leibovitz by her next-door neighbor. The suit was settled in 2003, when the photographer bought the litigant's building for $1.87 million. So, she wound up paying for three properties (12,000 sq. ft. in all), which contributed to a tenuous financial situation and the loan from Art Capital Group, according to Bloomberg News.

These transactions were only part of a mountain of debt amassed by the photographer. From 1999 to 2008, Leibovitz borrowed extensively to purchase property and refinance the debt she was carrying. In total, her activity stretched to more than a dozen loans, Bloomberg News reports, all on the back of her real estate holdings. Two 2006 loans – for $4.7 million in November and $2.5 million in December – were extended by Rhinebeck Properties LLC, which happens to have the same address as Conde Nast Publications Inc.

FYH Village, which paid $3.3 million for 755 – 757 Greenwich Street in January 2001, sold them to Leibovitz for $4.15 million in April 2002. Another partner in FYH Village, Charles Yassky, noted that the homes were "unusual and charming" nothing that it was a rare find for a developer in New York.

With Leibovitz at the helm, the renovations did not proceed as planned. Work done in the cellar without a permit undermined a wall with a neighboring house. A chimney collapsed, triggering a gas leak (and an evacuation). The duration exposed the three buildings to the elements. Residents dubbed the new owner "Hit & Run Annie" during protests outside the homes.

Inside the buildings, an estimated $5.4 million to $14.4 million in design work was completed (according to Bloomberg News interviewed with design and renovation experts). This was followed by late tax payments of $1.8 million in 2007 and 2008. In June 2008, Leibovitz approached Art Capital Group, which would eventually lend her $24 million. Yet, the company required that the photog make it an "irrevocable, exclusive agent" for selling her photo archive and real estate holdings for the duration of the loan and the two years following its payment.

Had only FYH Village held onto these rare homes, as they now wish they had, the outcome may have been much different.

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