Word that the legendary club CBGB is in danger of getting priced out of its Bowery hole-in-the-wall by a possible $20,000-per-month rent hike roiled the rock world last month.
But the irony is that the greedy landlord poised to uproot CB's is not some condo-crazed speculator but the Bowery Residents' Committeea 34-year-old homeless-services agency.
Gentrified by the homeless? Now there's a twist.
And now CBGB is in danger of being evicted for failing to pay more than $75,000 to BRC, which runs a shelter and a drop-in center upstairs from the club.
On February 17, the not-for-profit issued a "notice of default" ordering the punk landmark to pay up or face summary eviction.
CBGB owner Hilly Kristal contends he was paying faithfully, but blames the BRC for not notifying him of annual rent increases in the club's 12-year lease. He points to a pair of December 2003 invoices amounting to less than $1,300. "If we owed all this money, why didn't they say something then?"
Kristal says he can pay in full, but is holding off under the advice of his lawyer. Back rent, he feels, may be the only foothold he has on the 31-year-old venue, whose lease is up at the end of August. "My position is, give me 10 more years at a rate we can pay, and I'll get you the money now," says the 73-year-old from his cramped "office," a pair of old metal desks jammed in the club's entryway and plastered with the stickers of just about every band that has ever passed through. Kristal can't afford to stay if BRC doubles his rent to as much as $40,000 a month, which is what he claims the agency quoted him last spring.
BRC executive director Muzzy Rosenblatt says the increase was never firm, but as of now, lease renewal isn't even on the table: "Why should I negotiate a new lease if he's still not complying with the existing one?"
The two sides are due in court on March 14.
Just how CBGB ended up being a subtenant of a homeless shelter speaks to the vagaries of the Bowery itself.
In 1973, when Kristal took over the storefront of the Palace Hotel, an infamous flophouse at 315 Bowery, he leased directly from the owners. Kristal considered buying the building in the early '90s, when the Bowery was swimming in crack, but couldn't afford the roughly $4 million price tag. "I never had that kind of money," says Kristal, who still lives in a tiny rent-stabilized apartment around the corner. (He says he only really started to turn a profit in recent years through CBGB Fashions, which sells t-shirts and other club merchandise.)
So the owners turned over management of the building, along with neighboring 317 Bowery, to the BRC, with a 45-year net lease on both properties. Kristal speculates the owners settled on the long-term lease with BRC because it was the only way to rid themselves of troublesome SRO tenants. "I don't think anyone else but another homeless group could have dealt with it," he says.
Kristal was given a 12-year sublease and says he remained "friendly" with BRC until 2000, when the management informed him that CBGB was more than $300,000 in arrears. Kristal blames both his own and the BRC's slack accounting: "We used to bring the checks upstairs but then they told us to stop doing that. But then they never came to pick them up, or billed us, or anything."
Rosenblatt, who took over as director in 2000, disputes this claim but concedes his agency dropped the ball. "We're not a commercial landlord," he says of BRC, which has evolved into a $30 million-a-year homeless-services provider managing 23 programs in the city.
After a seven-month court battle, CBGB was ordered to pay roughly $223,000 in monthly installments. Then an October 2003 inspection by the city landed CBGB with a big stack of building and fire code violations. Rosenblatt says Kristal's response was lax, and both the owners and BRC filed suit.
Kristal claims he immediately called an architect for help, installing flame-retardant curtains, fire-safe doors, and such. "Anything that had to do with safety, I fixed within a week," he maintains. The issue is still being litigated, though Kristal faults the BRC for failing to answer its own violations.
BRC can hardly claim to be a perfect landlord. Kristal claims that for three years, 315 Bowery had no furnace; the club had to make do with small electric heaters. The club has also contended with BRC's clients harassing patrons and panhandling out front.
It's hard to conceive of many businesses other than the doggedly downscale CB's that could handle living below a 24-hour drop-in center, where police and ambulances are called in regularly. Yet Rosenblatt says he's fed up with Kristal: "I'm not going to subsidize a for-profit nightclub. The money I should be using to help homeless people I'm having to pay to lawyers just to get Hilly to meet his obligations."
But with MTV calling and bands ready to battle for the club, the backlash from moving to evict this downtown institution could cost a lot more.
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