The earliest co-ops to go bust...

Then there was the first 22 years of 834 Fifth.

Built as a co-op in 1930, shares for only 10 of the 24 apartments were sold. The sponsor (Campagna) defaulted on his maintenance payments for the 14 remaining, so the co-op took title to those shares and rented out some of the 14. None were saleable. A few years later the co-op gave up and title went to the mortgage holder. Their investments (e.g. $275K for 24 rooms and eight baths) wiped out, the 10 were now paying rent to a landlord.

MetLife sold the building to Laurance Rockefeller in 1946. He sold it to a new co-op in 1952. All the tenants bought, including some who'd originally bought in 1930.

I think the W67th artist co-ops were a little more stable, no?

Yes. There're quite a few co-ops from the late '20s and earlier that weathered the Depression nicely. I'd say virtually all of them, but that'd just be anecdotal. 834 Fifth failed only because it hit the market a few years too late and was too over-the-top luxurious for its market.

I think there was a whole slew that went under around WWI, but I don't know which or why. Probably the Panic of 19xx.

From 1876 or so, through WWI, co-ops usually included some rental apartments, with the idea that rents would subsidize the owners' maintenance. That turned out to be a hassle, though, what with rents going up and down, and having to play at being landlord. From 1920 until the rise of condos, almost all that were built as co-ops (i.e., not conversions) had no residents who weren't owners. See http://books.google.com/books?id=eCoNAQAAIAAJ&pg=PA219

No clue how many busts there were. The earliest were low-rise, so as increasing land values made the taxes too much to carry and the co-ops uneconomic, they sold out.

I wonder if any coops sold out for redevelopment in modern times. I know that squat wide little building along the East River on Beekman Place seriously considered it in the 1980s, but it went nowhere.

And plus also besides, I vaguely recall there being major covenant restrictions around there, but maybe that was prior to the (1920s?) construction of the apartment buildings that sit on the site.

I guess it's tough to get a majority to vote to sell. One of the little rowhouse co-ops did sell out in 2005 or so, for 535 WEA. Imagine getting a building with 100 owners, who can't agree on what color to paint the f'ing lobby, coming to consensus on selling out....

I was wondering how 525 WEA happened. I assumed they had to buy out a lot of RS tenants. Although chances are good in that scenario that they DID need to buy out a few non-purchasing RS tenants.

For sure. Other than the one co-op, I think the rest were your usual two-per-floor-ish rentals. Once in a while you'll see a paid-to-move RS/RC tenant's new lease memorialized on ACRIS, but otherwise no record.

149 East 61sr Street was the first Coop to get liquidated in the last downtown. One of its
Sponsors was later convicted of bankruptcy fraud. A small # of others we-deconverted in that
downturn.

Here's another one from the 1930s/1940s: http://streeteasy.com/nyc/building/812-park-avenue-manhattan

From a tax-case decision, where owner tried to deduct loss of value of co-op shares:

"FINDINGS OF FACT
The petitioners, husband and wife, reside in New York, New York. They filed their joint income tax return for the taxable year with the collector of internal revenue for the Second District of New York.

On September 2, 1927, the petitioners purchased for $38,000, 380 shares of stock of the 812 Park Avenue Corporation, hereinafter called the corporation. The only asset owned and operated by the corporation was an apartment house building located at 812 Park Avenue, New York City, which was designated and conducted as a cooperative apartment house. The property was then subject to a first mortgage given to the New York Life Insurance Company to secure a loan of $1,700,000. The petitioners' stock certificate, issued to Mrs. Amen, recites that, ‘The shares represented by this certificate are held subject to all the terms and conditions of an Indenture of Lease dated the 7th day of October, 1927, between 812 Park Avenue Corporation and Marion Cleveland Amen.‘ The certificate was not assignable and the owner's rights thereunder were contingent upon her fulfilling the terms and conditions of the lease. The certificate of incorporation granted to the corporation the usual broad powers to own and operate real estate, to deal in securities, etc.

The lease between the corporation and petitioners was an elaborate document of 26 printed pages. The lease alloted to the lessee a designated apartment, so long as she should continue to hold her shares in the corporation and fixed a nominal rental. The lease provided for many contingencies which might result in its termination and contained certain covenants requiring the lessor to operate the building properly and the lessee to pay the rent and the operating assessments (including taxes) as determined by the lessor's Board of Directors, and to protect and conserve the premises. The lease further provided that the stock certificate should contain the legend above set forth.

At the time the petitioners purchased their shares in the corporation they took possession of the apartment allotted to them and occupied it until September, 1946, when the mortgagee foreclosed the mortgage on the building. From March 28, 1940, to May 13, 1946, the rental and assessments paid by the petitioners were $285 per month. They were slightly higher theretofore.

When the petitioners first occupied their apartment most of the apartments in the building had been sold and later the building was fully occupied. At the time of the stock market crash, vacancies began to appear and continued to increase in number. The situation became very serious and crucial in 1938 and 1939. In 1939, 1940 and 1941, the corporation sustained losses of $6,941.49, $4,518.20 and $56,002.07, respectively. In 1941, the corporation did not pay the interest on its loan and was not amortizing the mortgage, as required by the mortgage agreement, and the mortgagee threatened to foreclose. On March 11, 1943, the New York Life Insurance Company took over the property as mortgagee in possession.

On June 20, 1946, the mortgagee filed a foreclosure action against the corporation and a judgment and order of foreclosure was entered in September, 1946. In that month the real estate was sold to the New York Life Insurance Company for $600,000. A deficiency of $1,296,656.64 resulted. On November 25, 1947, the corporation was dissolved. There were no remaining assets for distribution to the stockholders.

On October 30, 1946, the petitioners entered into a new lease agreement for their apartment with the New York Life Insurance Company for one year at $3600 rental and on September 30, 1947, the executed another lease for two years at a yearly rental of $4140. The leases contained no reference to the petitioners' stock ownership. The petitioners' 380 shares of stock in the corporation did not become worthless in 1941. The purchase of the stock was not for purposes of investment.

In his notice of deficiency the respondent disallowed the $19,000 as a long-term capital loss on the ground that the loss on stock in a cooperative apartment which the petitioners occupied as a residence is not an allowable deduction from income."

Epilogue: the petitioners' lease fell under the brand spanking new Rent Control law, and they lived and lived and lived and lived happily ever after for decades to follow, paying $4140 per year. Poor, but happy.

You'd think so, but no. 812 Park went co-op again in 1950, but by then the Amens were on E. 57th.

He was a racket-busting DA and she was Grover Cleveland's daughter. (NYT archive turns up the oddest things....)