Michael Bolla Talks About His Experience at the Madison Jackson Building
The other day it became known that a Queens-based real estate broker, Modern Spaces, is taking over leasing at 371 Madison St., the beautiful former school building that’s been vacant for decades. A few weeks ago, and then again yesterday afternoon, we spoke with the previous broker and co-developer, Michael Bolla, about his experience in preparing the building for new life as a residential property.
We’ll have his take in a moment. But since a lot of time has gone by since the project, formerly known as the “Madison Jackson,” was first proposed, here’s a recap.
The building was purchased by Chinatown banker and property owner Thomas Sung for $535,000 in 1983, at a time in which the city was unloading as much real estate as it possibly could. Bolla, a Douglas Elliman managing partner who has sold apartments to a wide range of celebrity clients, appeared on the scene two years ago. In several high profile news stories, he promoted 371 Madison St. as a luxury condo development in an historic building and neighborhood, and touted a host of amenities, including an indoor swimming pool, concierge and 24-hour organic room service. He held several large events in the neighborhood, appealing to both the Orthodox Jewish and Chinese communities. A piece in the Times about the Madison Jackson carried the headline, “A Building as a Catalyst For Jewish Culture.” About six months later, Bolla reported that Mr. Sung had decided to sell the entire building. But by the end of 2012, there was another change of course. The Madison Jackson, Bolla said, would become a rental property. But those plans never materialized, either, and the project went largely silent.
That was until last week when Modern Spaces announced it was taking over rentals and would be targeting “artsy, trendy renters” priced out of other areas. Curbed reported that apartments would start just shy of $3,000/month when leasing begins in June.
In our recent conversations, Bolla talked about his two-year relationship with the Sung family and the challenges he encountered marketing the building. Throughout the discussion, he emphasized that Mr. Sung was always cordial and complimentary — and that even today there is no personal animosity between the two camps.
The 1911 Renaissance revival building has always had great street appeal. “The building was amazing,” Bolla said, while quickly adding that “nothing (inside) had been touched in 15 years.” The apartment finishings were never high-end, and by the time prospective buyers began walking through the property, some floors were buckling and the common areas needed updating. In quick order, Bolla said, he had buyers for 17 units prepared to go into contract. But he told Sung that – in order to sell all 110 units – renovations were definitely needed. Bolla waited for the family to make a decision. “They were not issuing the contracts,” he explained. “It was clear to me they didn’t know what they wanted to do.”
We put a call into Mr. Sung’s daughter, Vera, who had been taking the lead on the Madison Jackson project. There was no reply, so we don’t know the Sung family’s perspective. But one thing is very clear: the last couple of years have been extremely challenging for them. Just three months after the condo units hit the market, news broke that Abacus Federal Savings Bank, owned by Thomas Sung, was being accused by New York City’s District Attorney of mortgage fraud. The Chinatown institution has been fighting a prolonged legal battle ever since. it stands to reason that the Sung family has had much bigger problems to confront than a 100-unit property on the Lower East Side.
After unsuccessfully pitching Mr. Sung on a renovation plan, Bolla brought word to the family that there had been multiple inquiries about buying the whole building. After listing the property for $70 million, several offers came in, including one for $64 million. But after the buyer’s engineers inspected the building and found problems, the offer went down to $59 million. Bolla said Sung declined to accept the deal, pulled the building off the market and decided to go the rental route. A couple of months ago, Bolla and Douglas Elliman were approached by the Sungs about handling the rentals on a non-exclusive basis. They passed.
Bolla worked on the Madison Jackson project exclusively for the better part of a couple of years. “We went through a monumental effort and created a lot of value there,” he argued. “I don’t know too many real estate projects in New York that received the amount of media attention it did.”
While that news coverage helped generate interest from buyers worldwide, Bolla said a generally snarky tone that permeated many of the stories about the Madison Jackson was harmful. He dismissed the notion, floated by some detractors, that the building was handicapped by being too far from the subway and too close to public housing projects. “Everything you read in the newspaper about my inability to sell the units because of the location was a lie,” he asserted.
We also talked about criticism from skeptics, who suggested that overtures to the Orthodox Jewish community were little more than a publicity stunt. “You can’t do business on the Lower East Side,” Bolla said, “which is a neighborhood steeped in so much history, it is so religiously and ethnically meaningful to so many people, you can’t just come in and not pay attention to that.” He added, “I had a predisposition to want to support the Jewish community because of my own background (Bolla is an observant Jew) … but we were equally supportive of the Chinese and Latino communities” on the Lower East Side.
“I have no idea why they hired me,” Bolla said of the Sung family. “You don’t hire Douglas Elliman and Michael Bolla if you just want to throw some apartments on the market,” he continued. Bolla said the amenities he brought to the Madison Jackson building were essential to the overall marketing strategy. “Real estate development is very sophisticated in New York City,” he explained. “The days of putting a building on the market, especially 100 units, and not offering amenities, that’s over.”
Bolla said he imagined things going very differently on the Lower East Side, but added that disappointment is part of the real estate business. Bolla said he only wishes Thomas Sung well, and hopes the project finds its footing, even if he’s no longer involved.