Frances Steloff, the 99-year-old former owner of a New York landmark, the Gotham Book Mart, has filed suit against the American Friends of the Hebrew University (AFHU) charging that the organization defrauded her out of her midtown Manhattan building after she offered AFHU a million-dollar gift.
Since 1920, Steloff has owned, managed and lived on the floor above the Gotham Book Mart, a literary jewel in the center of Manhattan’s diamond district on West 47th Street. The Gotham specializes in unusual books, experimental or controversial literary works, poetry, theatre, film and Eastern spirituality.
Steloff is credited with boosting the careers of now legendary authors when they were little known or unaccepted, including James Joyce, T.S. Eliot, William Carlos Williams, Gertrude Stein and Ezra Pound. Steloff defied the censors and sold James Joyce’s “Ulysses” in the Gotham. She smuggled D. H. Lawrence’s “Lady Chatterly’s Lover” into the country when it was banned. She befriended some of the most celebrated and controversial literati of this century.
The Gotham Book Mart was born in 1920 at 128 W. 45th Street, just a few blocks from its present location. At 33, Steloff founded the shop with $100 and less than 200 books. In 1923 she moved the Gotham to 51 W. 47th Street where it grew into a center not only for the sale of avant garde literature, but as a gathering place for struggling artists and writers.
After the landlord refused to renew her lease in 1946, Steloff searched desperately for a new home for the Gotham but found the real estate prices beyond her means.
Three of Steloff’s friends then approached Columbia University, one of the city’s largest landowners, to ask for a building to house the Gotham. Columbia offered her the building at 41 W. 47th Street. Steloff bought the five-story brownstone now under dispute from Columbia in 1946 for $65,000.
EVOLUTION OF A DISPUTE
In 1967, Steloff, then 80, sold the Gotham Book Mart to Andreas Brown, a California bibliographer, rare book appraiser and a loyal Gotham customer. She entrusted Brown to preserve and continue what she called her life’s work.
But Steloff still owned the five-story brownstone at 41 W. 47th Street, where both she and Brown lived in apartments above the bookstore. The bookstore occupies the ground floor and the basement once housed Steloff’s most valued literary treasures. One floor above the bookstore is devoted to a gallery where the James Joyce Society, which Steloff founded, meets periodically.
The dispute which has resulted in Steloff’s case against AFHU began about seven years ago when she decided to sell the building to Andreas Brown to insure the Gotham Book Mart’s survival.
Steloff, in 1979, agreed to sell Brown the building for its fair market value at the time, an estimated $1 million, according to an affidavit filed in the case by Steloff’s attorney Martin Gold.
She decided to donate the proceeds of the sale to AFHU to set up a scholarship and fellowship fund for students and to sponsor speeches at the Hebrew University by prominent writers. Steloff planned to donate the money in the name of her parents, who were religious Jews.
DIFFERENCES OF OPINION
AFHU then advised Steloff that she could increase her gift by giving AFHU the building and avoiding a capital gains tax of roughly $250,000 she would incur by selling it to Brown. Then, according to Steloff’s lawsuit, she made a verbal agreement with representatives of AFHU to make the gift of the building conditional on favorable lease terms and an option for Gotham to buy the building for $1 million.
AFHU Attorney David Ellenhorn said no verbal agreement was ever made. But in an interview with the Jewish Telegraphic Agency, Steloff seemed to have a sharp recollection of the events some seven years ago.
She recalled a meeting in March 1980, while on vacation in Florida, with Charles Feinberg, vice president of AFHU, to review a draft of the agreement.
During this meeting, Steloff told the JTA she crossed out portions of the agreement which she did not accept, including a provision to allow AFHU to sell the building “at the highest price obtainable.” Steloff said she understood at the meeting with Feinberg that the draft would be amended to include a lease and option to buy for Gotham. Steloff signed the draft.
Although a second agreement followed, also signed by Steloff, it did not contain any provisions for the resale of the building to the Gotham Book Mart, she said.
Following the meeting with Feinberg, Steloff spelled out in a series of letters to AFHU her explicit wish that Gotham Book Mart be given the option to buy the building for $1 million. As the years went by and the option or new amended agreement never materialized, Steloff became increasingly agitated in her correspondences.
SEEKS A GUARANTEE
In August 1984, Steloff wrote to Feinberg, “I naturally expected further discussions about the matter I objected to. It is certainly not a new objection, nor was it an afterthought. It was clearly understood at that first reading that the objectionable part would be revised. I never intended that the building should be used for real estate speculation or offered only to the highest bidder….”
By late 1985 Steloff said she demanded that AFHU return the building to her unless she received a guarantee that Gotham would be given an option to buy for $1 million.
The building is now worth about $2.5 million. Brown said diamond dealers come in almost daily offering to buy the building from him. Brown cannot compete with the diamond dealers in an open market situation today, he said.
Bob Pearlman, AFHU executive vice president, said “the facts are pretty clear–we have a documented agreement…with no understanding with regard to resale.” AFHU has lived up to its end of the agreement, Pearlman said. “We can’t have people going back and forth on agreements they made.”
But Brown said even if AFHU does not have a legal obligation to resell the building to Gotham, it has a moral one. Ellenhorn, AFHU’s attorney, said Steloff only wanted Brown to be given a five year lease with favorable terms. Furthermore, Brown has never offered to buy the building for a million dollars, he said.
Ellenhorn claimed Brown initiated the lawsuit and pressured Steloff to include the option to buy. “Mr. Brown would like to purchase the building for a million dollars to resell it,” Ellenhorn said. “The lawsuit was brought by his attorneys–we believe the lawsuit was guided by Mr. Brown.”
‘NOT HERE TO BUY OR SELL REAL ESTATE’
But Brown said that it is the AFHU, not himself, which would like to speculate with the building. “I’ve been running this bookstore for 20 years–I’m not here to buy or sell real estate, that’s what they do.”
The AFHU has made numerous proposals to Brown to allow him to perpetuate the bookstore, Ellenhorn said. But he has refused to sign a five-year lease agreement without the option to buy the building for a $1 million. In one of the deals though, the AFHU proposed the sale of the building to Gotham for $1 million with a condition that the profits from any resale would be split between Brown and AFHU.
Steloff rejected that proposal, saying in a letter dated July 1983, “I do not understand why anyone other than myself should determine the conditions of my gift.”
Although Ellenhorn said AFHU “still has high hopes of settling the case out of court,” they are definitely opposed to selling Brown the building for a $1 million.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
