Co-Op Coup

The "cooperative plan," used by landlords to unload hundreds of apartments on tenants at fat profits, last week turned up in the hotel business. Arnold Kirkeby, who has an eleven-hotel chain, announced a plan to turn Manhattan's elegant, 492-room Hampshire House into a coop, and thereby make a pretty penny. Kirkeby's company bought Hampshire House two years ago for $3,550,000 and later borrowed $3,350,000 on it. So far it has earned him less than $700,000 before taxes, which makes Kirkeby think "we are not making much headway."

Under his plan, rooms and suites will be sold to the present tenants for anywhere from $5,100 for an unfurnished bedroom and kitchenette, studio style, to $39,000 for a three-bedroom suite with terrace. In addition, the purchasers will have to pay maintenance charges, to 150 Central Park South, Inc., ranging from $1,404 to $10,374 a year. Kirkeby Operating Corp. will continue to run the hotel, its restaurants and bars. When owners are away, the management will rent the rooms and suites to transients, turn over the money to the individual owners.

Title to the property will be held by a nonprofit co-op of stockholding tenants which will also take over the debts on the hotel. The new stockholders will pay Kirkeby $3,000,000 which "would take us many years to get through the present [renting] arrangement." Having paid only $187,500 on the debts, Kirkeby's company in effect will receive about 650% on its cash interest in the property.

The tenants, said Kirkeby, will be paying only $6,350,000 for a property which he insists could not be duplicated now for less than $14 million. And 32% of what the tenant pays in maintenance charges can be deducted for tax purposes--which Kirkeby feels "means something to tenants like, we will have." More than half the present Hampshire House apartments have already been sold, said he, and the plan will go into effect on Jan. 1.

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