Sahara sale imminent?: don't hold your breath.

Will the vacant, blighted Sahara Hotel on 14th Street and Third Avenue finally be sold? Will the court allow more court arguments to forestall the forced sale?

Most observers of this unique case of the courts forcing a building owner to sell his property because of alleged illegal and improper actions against former tenants say it may Finally come to pass, as a buyer has signed papers to purchase the property for a whopping $8.2 million.

However, in the soap-opera style words of Judge Francis Murphy, the court appointed arbitrator and seller of the property, "stay tuned..."

LJWP Realty Corp., listed as the owners of the assembled properties at 201 East 14th Street and 125-31 Third Avenue, vow to fight the order and will refuse to hand over the deed to the property, further holding up the sale. LJWP Realty, now owned by the son of one of the former owners, Louis Pappas, still includes the initials of the Jay Wartski and Pappas. Wartski was heavily fined and sent to jail for collusion with drug dealers and illegal evictions. LJWP Realty attorney Jonathan David Bachrach accused the city of "improper motives to sell the property to politically connected people," and "stealing papers from the offices of the hotel owners," dubbing the city actions as "Sahara-gate."

Bachrach was not available for comment before press time.

With a purchase price of $8.2 million, the sale appears to be above market value, as appraisers recently said the property was worth about $5 million.

"This has been a long story, and will probably get longer," said Judge Murphy, who is overseeing the sale. "The price seems pretty good to me and was the best of 22 bids. I've been in touch with his [LJWP Realty] lawyer. I would say they are basically opposing the sale as they have all along, from day one, since 1982. They are not very happy."

The buyer of the property is slated to be Coral Realty, owned by Abraham Forkash. While the bidding was open until January 15th, Judge Murphy said they have already signed with Coral and are prepared to complete the deal when the deed is surrendered by LJWP. Coral owns several buildings around town, including 80 Lafayette Street, which they purchased in May 1997 for $16 million. The building is occupied by both the City Department of Transportation and the Administration for Children's Services.

If Coral acquires the property, new zoning rules will allow them to build up to about 19 stories. The new building owners would then be able to purchase air rights from other small structures in the area and be able to negotiate for more space by providing moderate income apartments through other low to moderate income programs that would give them an increased building height.

The new owners will need as much space as possible to make a profit on a new building. With an estimated 90,000 square feet of rental space, with an estimated value of $35 a square foot, rentals could bring in $3.15 million a year. Added to the rent of potentially 10,000 square feet of new commercial space at about $75 a square foot, that would add a minimum of $750,000 a year in income. This would have to balance out the debt service and building costs, (including the anticipated added expense of probable required sprinkler systems), and the purchase price that could escalate to more than $38 million.

LJWP Realty still will be left with a small piece of property now occupied by a pet store, but no residential units, and would not be able to build anything on that property.

David Gmach, executive director of the Union Square-14th Street Business Improvement District and Local Development Corp. (BID-LDC), said he is prepared to assist any new owner who wants to develop the property.

"No one can figure out what their [the building owners] strategy has been so far, and it is unfortunate that they have continue to oppose new ownership in the area," said Gmach, who has picked up the fight from his predecessor, Rob Walsh, who brought pressure to bear on the owners through fines from city agencies and aggressive pursuit of the court orders through the city's Corporation Counsel office.

Gmach said it may be premature to declare victory, given that the present owner vows to resist the sale. A final decision was due in the Appellate Division, First Department, this past Friday. No decision has been revealed.

"They are on their last leg, as every court has ruled against them, including the State Appellate Court," Gmach said. "This case is a tribute to the Mayor's Corporation Counsel Office, which has stuck with this for 15 years. I think though, the owners are on their last leg."

Assemblyman Steve Sanders, who represents the area, took an interest in the site since taking office because of alleged illegal construction, hazards created by the construction, and creation of stores that sell pornographic materials at the site. Burt Nussbacher, an aide to Sanders, said he believes the court orders will hold up and "there is light at the end of this tunnel."

"I think we are now closer to the end than before, though it's not over till it's over," Nussbacher said. "There is a legitimate buyer process approved by Appellate Division. They (LJWP) will fire their final shots, but I think it will finally happen."

Sanders was equally optimistic that the Sahara saga was seemingly coming to a conclusion.

"What would appear to be the imminent transfer of the Sahara site to a new owner signifies the end of a long community nightmare," Sanders said. "For years, the Sahara was a festering nuisance, being a focus for drugs, prostitution and street-level X-rated establishments. It is my expectation that the new owners will construct an apartment building - modest, contextual in size - having respectable street-level retail establishments. The new building at that site will undoubtedly help effectuate an eastward continuation of the exciting renaissance of 14th Street."

Debra Rand, an attorney for the Corporation Counsel office, has been working on the case since 1982. At that time, she was working for the West Side SRO Law Project and represented tenants in other buildings owned by the Wartski family. She has also worked on this case from the beginning of her 11 years in that office. She said they checked the new potential owner to make sure there was no connection with the former owners. The court order that forced the sale stipulated that any buyer be at "arm's length."

"I believe the sale will hold up in court, but I am not the court," Rand said. "They have filed repeatedly for stays and they have lost every one."

As to how she feels about a possible end to the Sahara saga, a fight that cost the city more than a million dollars, she said her feelings "weren't relevant," but "I would certainly be pleased if this were finally over."