Alongside Katz’s Pastrami, Luxury Condos
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Version 0 of 1. While other New York City institutions have succumbed to the insatiable appetite of a hungry real estate market, the 128-year-old Katz’s Delicatessen, with $19.95 pastrami sandwiches and a legion of fans, found a way to hang on. Last year, the family-owned deli at 205 East Houston Street sold two neighboring properties and its air rights for about $17 million, paving the way for a developer to build an 11-story condominium next door. The arrangement ensures that, for at least another generation, New Yorkers will be able to get corned beef and brisket at the Lower East Side deli that was immortalized in the 1989 film “When Harry Met Sally.” The sale was part of a $75 million acquisition of 12 single-story commercial spaces that spared Katz’s, but sealed the fates of all of the other mom-and-pop businesses on East Houston Street between Orchard and Ludlow Streets. They were all displaced to make way for the new condo. Sales are set to start by the end of the month at 196 Orchard, with prices for the 94 apartments starting at $1.075 million for a 551-square-foot studio. At a time when beloved destinations are closing at a disorienting pace, the survival of a symbol of Jewish culinary history comes as a relief to many. “So many people in the city have a story and a connection to this place,” said Jake Dell, 28, sitting at a table in the back of Katz’s, which his family bought in 1988. “To me personally, preserving it was the most important thing.” Katz’s, which opened in 1888 under a different name and at a different spot nearby on Ludlow Street, is the oldest surviving Jewish deli in North America, according to David Sax, the author of “Save the Deli” (Mariner Books, 2010). “It’s democratic — everyone goes to Katz’s,” Mr. Sax said. “It retains that feeling of this New York that is, for a large part, disappearing.” In the more than a century that Katz’s has been selling sandwiches and hot dogs on the Lower East Side, the neighborhood ushered in generations of immigrants who took refuge in the area’s tenements. In the 1970s and 1980s, like many parts of the city, it suffered through an era of disinvestment, marked by rising crime and drug use. At one point, “This was a place where you came to buy drugs, not pastrami,” said Mr. Dell, whose family hosted his bar mitzvah at the deli. Now, paradoxically, small businesses that survived more trying times are succumbing to the era of feverish real estate development, with its influx of wealth. Many longtime Lower East Side residents worry that the deal Katz’s made means the deli will survive in a vacuum. With all the other neighboring businesses gone, it could become a mere relic in a neighborhood of walk-ups that are rapidly being replaced with glassy condos, expensive boutiques and national chains like Whole Foods. “It’s really a loss for the community when the mom-and-pop businesses disappear, which they really are at a frightening pace,” said Richard D. Moses, the president of the Lower East Side Preservation Initiative. “When you lose too many, what you end up with is an environment that doesn’t feel urban, doesn’t feel local. It feels more generic.” On a block where a kebab could once be had at 2 a.m. from Bereket, the 24-hour Turkish restaurant that was forced to close in 2014, there will now be a 30,000-square-foot Equinox gym and spa with a lounge and juice bar; condo residents will be able to access the two-story gym through a private entrance. Gone too, are places like Ray’s Pizza and Empanada Mama. While such spots and the unmemorable single-story buildings that once housed them could not claim any historic significance, they were popular haunts that gave the area its character. “A lot of people grew up going to Ray’s Pizza on that block, and it’s gone now,” said James Rodriguez, an organizer for the Good Old Lower East Side, an affordable housing group. “And what’s it being replaced with? It’s an Equinox. A lot of people aren’t going to be able to afford an Equinox.” The developers of 196 Orchard insist that the changes have not obliterated the retail that existed in the area, only moved it, since some of the shops are now in new locations, like Karaoke Boho, which reopened nearby. Other businesses, including Bereket, are gone. “I’m sorry they went out of business, but it’s part of evolution,” said Ben H. Shaoul, the founder and principal of the Magnum Real Estate Group, which is developing 196 Orchard with the Real Estate Equities Corporation. In fact, the condo’s ground floor will include 20,000 square feet of retail, with one storefront reserved for a locally owned business, likely a cafe or restaurant. “You call it gentrification, I call it ‘cleaning it up,’ ” said Mr. Shaoul, who has been buying properties on the Lower East Side since 1998. Katz’s survival, however, was always part of the plan. “We were adamant in keeping them there,” he said, sitting in Dirty French, a restaurant in the 20-story Ludlow Hotel that opened across from Katz’s in 2014. “I love pastrami.” The condo’s marketing materials show a young woman gazing off into the distance, Katz’s neon sign behind her. The building, designed by Ismael Leyva Architects, will have a black and bronze brick facade with industrial casement windows and a 4,100-square-foot landscaped rooftop. Apartments will feature concrete ceilings, wide-plank white oak floors and kitchens with charcoal lacquer cabinets, marble backsplashes and black quartz countertops. One-bedrooms start at $1.275 million for 657 square feet; two-bedrooms start at $2.285 million for 970 square feet; three bedrooms start at $4.2 million for 1,555 square feet; and four bedrooms start at $4.95 million for 1,770 square feet. Katz’s is not the only historic institution cashing in on the Lower East Side’s soaring real estate values. Demolition of the Streit’s matzo factory could begin by the end of the month. A year ago, the family-owned business sold the Rivington Street factory to developers for $30.5 million, bringing 90 years of matzo production there to an end. It will be replaced with a seven-story glass condo, 150 Rivington Street, that will house 45 one- and two-bedroom apartments. Sales begin in May, with one-bedrooms starting at around $975,000. For the Jewish community, the loss of Streit’s was profound, signifying the end of an institution that had been producing the unleavened bread for Passover for generations. “It was part of the Lower East Side ethos — so, it’s sad,” said Laurie Tobias Cohen, the executive director of the Lower East Side Jewish Conservancy. “It’s part and parcel with everything else that’s been happening in terms of real estate.” A year ago, during the factory’s final weeks, customers filled the retail shop for one last visit, according to Michael Levine, whose documentary “Streit’s: Matzo and the American Dream” premiered at the Film Forum on April 20. “People felt a loss deeply on an emotional level,” he said. “I think people thought they were losing a part of their family.” The condo’s design, with 13,000 square feet of retail, will be clad in glass, a modern break from the brick buildings that stood there before. Developers plan to decorate the lobby with memorabilia from the original building. Other salvaged objects will be housed in a museum at the new Streit’s factory, which is being built in Rockland County, N.Y. “You have to try to preserve at least some link to the past,” said Arthur R. Stern, the chief executive of Cogswell Lee Development, which is developing 150 Rivington Street with Gluck+, which is also the architect for the project. “That’s ultimately what made the city what it is.” On an unseasonably warm afternoon last month, about three dozen people, mostly employees of the development team, gathered on the factory’s rooftop for a ceremony to commemorate a place where matzo had been made since 1925. A feng shui expert, R. D. Chin, blessed the property with a bowl of vodka-soaked rice, orange peels and incense. “It’s very important to acknowledge the changing of the hands,” he said. The factory was empty, the stairwells lit with lanterns. Rooms that once housed 75-foot ovens and dozens of workers now had plywood covering the windows. Aaron Gross, a fifth-generation owner of the family business, was reflective as he stood on the roof. “It’s eerie being back,” he said. “You’re expecting to see the machines, you’re expecting to see the people.” |