Sotheby's auction house on the auction block?

Real Estate Weekly, June 5, 2002 by Parke Chapman

Sotheby's 10-story office building at 1334 York Ave. is reportedly on the auction block. A source with ties to the firm claims that former Sotheby's chairman A. Alfred Taubman, who owns the building, is actively seeking a buyer.

The source added that the Hospital for Special Surgery, which leases space directly across the street from Sotheby's, is interested in buying the building.

A spokesman for Taubman Centers Inc., the mall company Taubman founded 51 years ago, did not return a call for comment. It was unclear at deadline whether Taubman Centers or Taubman, personally, owns 1334 York Ave.

Taubman resigned as chairman of Taubman Centers last year after being convicted of conspiring with rival auctioneer Christies' in a price fixing scheme. The conviction alleges that Taubman stole $400 milion worth of commissions between 1993 and 1999. In April, Taubman was sentence to one year and a day in jail. His lawyers argued that the sentence was too harsh because Taubman is 76 year old and in failing health. He is now appealing the sentence.

A spokeswoman for the Hospital for Special Surgery declined to comment on the hospital's interest in the building However, she was unaware of any plans to acquire the building.

The circa 1921 building underwent a gut rehab three years ago that added 6 floors.

A Kodak warehouse previously occupied the space, and Sotheby's flagship has been here for the past 20 years.

By all accounts, the space is tailored for a ritzy auction house. The facade of the building consists of a nine-story glass atrium overlooking York Avenue. Next to the first floor lobby is a restaurant called BID which opened on Sept. 10 of last year.

The building houses five sale rooms encompassing 75,000 SF of exhibition space. The firm's main auction facility can seat as many as 1,200 people. A dozen separate skyboxes --designed for discreet bidding--overlook the meizanine.

With such customized space, it is hard to imagine just any other tenant occupying it. Millions, went into configuring it, and millions would likely be necessary to convert it into less conventional office space.

Sotheby's arch-competitor Christie's is one potential candidate, considering the- dearth of surplus space it has (and apparently needs) at Rockefeller Center. But Christie's is also coping with some belt tightening of its own, making such a lease on York Avenue unlikely. As one source pointed out, there is the chance that Taubman intends to market an empty building.

"Is (Taubman) trying to sell it empty? Or is he going to arrange for Sotheby's to continue lea sing space here? These are some important questions, if he is looking to sell the building," said real estate consultant Peter Pattison.

Pattison. conjectured that if Sotheby's were forced to move from this building, the outcome could be devastating.