The Saga of 223 Water Street

Artists vs. Workers vs. Landlords on the Brooklyn Waterfront

Usually, tenants don't fight for the right to live in a building tainted with hazardous chemicals. Usually, environmentalists don't get tickets for illegal dumping, developers don't offer reporters $100,000 to take a building off their hands, and daughters don't turn against their fathers.

But while the saga of 223 Water Street in Brooklyn has these unusual elements, the battle over the 100-year-old warehouse in the shadow of the Manhattan Bridge also has all the hallmarks of a classic New York City real-estate clash. Outlined by protracted landlord/tenant grief, accusations of political meddling, and cries of racism and class warfare, the skirmish is taking place in a long-ignored neighborhood now on the rise. Wedged between the landmarked community of Vinegar Hill and swank Brooklyn Heights, 223 Water is in the heart of DUMBO, an artist colony of brick warehouses along the East River, where century-old shop floors are reborn as huge living lofts with killer Manhattan views. Can Banana Republic be far behind?

Though years of bitter litigation, deal making, and tsuris have kept much unresolved about the future of 223 Water Street, one thing seems certain: that future won't include the sole remaining manufacturing tenant, Horizon Steel, a metal-cabinet factory that employs 22 wage workers, most of whom are black or Latino. At press time, employees were under orders to vacate the premises.

"I believe that this area and this building are going to be a gold mine" where factory workers don't fit in, says Juan Rodriquez, who has worked at the factory ever since Ted Mestel, who owns Horizon and who owned the building, hired him 15 years ago as a parolee; Horizon had an arrangement to give ex-cons jobs. Marsha Egeth, who is Mestel's daughter and was his employee, is now allied with Rodriquez against her father. "What has happened here is New York City favoring one society over another: they're pushing out minority workers for artists."

Indeed, the warehouse is home not only to Horizon. It was also New York City's largest artists' loft building, where 27 sculptors, painters, and film producers once lived with their families; now, only five lofts are occupied. The building's status as a loft dwelling adds to the rancor, making it a piece of real estate clad in extremes. Relationships between loftlords and their artist-tenants are arguably the most hostile in the city, and the desire of loftlords to dump their tenants, and of tenants to stake their claim, is powerful.

Mestel, like most loft building owners, never intended to be a landlord--he simply let artists illegally move into dormant commercial space before the 1982 loft law required compliance with the residential building code. Loft tenants, on the other hand, have some of the best living situations in the city: huge amounts of space for paltry sums. Deborah Masters, one of the first artists to move into 223 Water Street, pays $442.34 a month for about 6000 square feet (although she is now on rent strike). The 46-year-old sculptor says the low rent has allowed her to become a successful artist, with shows at the Whitney and a house in Umbria. Other loft rents in the building range from $226 to $643.

Ironically, it was Horizon that invited the artists in, and now it is their presence that will likely force the factory out. In January, Mestel sold the building to developer Josh Gutman. Rodriquez and other workers say they had an oral agreement with their old boss to buy the company and lease part of the building. Unbeknownst to them, they say, Mestel promised Gutman the factory would close. Gutman's lawyer, Sheldon Eisenberger, explained it this way: "If Mr. Mestel wants to change his mind, why can't he?" Today is to be the factory's last day.

Mestel, president and sole shareholder of Horizon, commented through his attorney, Michael Hiller. In a written statement, Hiller said that although Mestel had fired Rodriquez and two other Horizon employees in late September, he "is currently in negotiations" to sell them a related cabinet-making firm. Mestel had nothing more to say, Hiller wrote, "despite his clear and fervent desire to provide further comment."

Egeth, who calls herself as "a consultant to the minority workers," says she worked for her father for 30 years before resigning in 1995. "Mr. Mestel is my father and I love him," she says in Horizon's office, an entirely unglamorous affair where half a dozen densely populated fly strips hang from the ceiling. "But I have a distinct disagreement with certain things he has done. My belief is that a lot of wrong has been done here."

Even Masters, who has been at the center of every battle with Mestel, Egeth, and now Gutman, and who blames Egeth for many of the woes, says it would be a "pity" if workers lose their jobs. "I think it's tragic," says Masters. "But it's not our fault."

When 223 Water Street was built late last century, Egeth says, it was first a cork factory, and, later, a Borax plant--a ghost of a sign for the soap is visible on the brick facade. In 1962, Mestel started his cabinet company in a space he rented in the warehouse, which is actually six joined buildings. In 1975, he bought the compound. Two years later, he casually let a handful of artists move into the empty floors, glad for the rent they paid.

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