Battle for Manhattan House Heats Up

June 17, 2007
by Braden Keil
New York Post

It's not just the tenants who are allegedly getting booted from their market-rate apartments at Manhattan House. Now it's the new owners who are trying to evict each other.

Jeremiah O'Connor and Richard Kalikow, who are in the midst of the city's costliest condo conversion - at a reported $1.1 billion - have taken their skirmish to Manhattan Supreme Court, where a judge has determined that either man must buy the other one out in 30 days.

At stake is a five-building, 20-story complex, where Grace Kelly once resided, which encompasses an entire city block between Second and Third avenues and East 65th and 66th streets. The two moguls bought it in October 2005.

The two paid $623 million - more than $1 million per apartment - and received nearly $800 million in additional financing. The 20-story postwar buildings, with almost 600 units, are slated to become pricey remodeled condominiums at nearly $2,000 per square foot as tenants leases expire.

"Jerry O'Connor has the upper hand on this ruling," said a source familiar with the case. "He already has the money, while Kalikow is going to have go fish."

Kalikow was said to have had the backing of UBS, but the enthusiasm of the Swiss-based financial giant for the project was said to be waning.

According to sources, O'Connor was dissatisfied with Kalikow's duties, which included coming up with a viable marketing plan.

Kalikow could not be reached, while O'Connor had no comment when reached at his office.

The tenants, meanwhile, are not going out without a fight.

While just over 100 residents have moved out, many, mostly rent-regulated, have said they're staying put. "They're going to have to cart me out of here in a box," vowed one resident.

But one elderly resident, Martin Burwick, a 97-year-old man in failing health, died of pneumonia, allegedly because of dust and asbestos kicked up by the construction work.