LANDLORD GREED KILLS CBGBs!!  LEGENDARY PUNK CLUB FORCED TO CLOSE                                            By Chris Flash

[SHADOW News -- December 15, 2006]: As a result of its landlord's refusal to negotiate a new lease, legendary rock club CBGBs was forced to close its doors indefinitely on October 15, 2006.

CBGBs (the letters of which stands for "Country, Blue Grass, Blues"), is world famous as the birthplace of punk music in the U.S. and has served as a launching pad for such groups as the Ramones, Blondie, Television, Talking Heads, Patti Smith, Richard Hell and the Voidoids, the Dead Boys, Reagan Youth, Murphy's Law and countless others, both well known and not as well known.

In 1973, Hilly Kristal took over a former Hell's Angels hangout on the ground floor of the Palace Hotel, an infamous flophouse at 313-315 Bowery. Over the following twenty years, with its policy of booking any bands wanting to play there, CBGBs became one of the most famous venues in the city for live alternative music.

Kristal considered buying the building in the early 1990s, when the Bowery was swimming in crack, but he couldn't afford the then roughly $4 million price tag. "I never had that kind of money," said Kristal, who still lives in a tiny rent-stabilized apartment around the corner.( He said that he had only started to turn a profit in recent years through CBGB Fashions, which sells t-shirts and other club merchandise.)

Around that time, the landlord, Palace Renaissance, Inc., turned over management of CBGBs' building, along with neighboring 317 Bowery, to a group called the Bowery Residents Committee (BRC), a non-profit organization that runs a homeless shelter and drop-in center upstairs from the club, with a 45-year net lease on both properties.

Kristal speculates that the owners entered into the long-term lease with the BRC because it was the only way to rid themselves of troublesome SRO tenants. "I don't think anyone else but another homeless group could have dealt with it," he said.

Kristal was given a 12 year sublease and said that he remained "friendly" with the BRC until 2000, when they informed him that CBGBs' rent was more than $300,000 in arrears. Kristal blamed both his own and the BRC's lax accounting: Muzzy Rosenblatt, who took over as the BRC's executive director in 2000, conceded that the BRC dropped the ball. "We're not a commercial landlord," he said of the BRC, which has evolved into a $30 million-a-year homeless-services provider, managing 23 programs in the city. After a seven-month court battle, CBGBs was ordered to pay roughly $223,000 in monthly installments.

On February 17, 2005, the BRC sent CBGBs a "notice of default," demanding that Kristal pay $76,000 for back rent or face summary eviction. Kristal said that he could pay, but decided to hold off, as per the advice of his attorney. The back rent issue, Kristal felt, was the only bargaining position he had on renewing his lease, which was to terminate on August 31, 2005. "My position is, give me ten more years at a rate we can pay, and I'll get you the money now." said the 73-year-old Kristal from his cramped "office," a pair of old metal desks jammed in the club's entryway and plastered with the stickers of just about every band that has ever passed through. Kristal said that he couldn't afford to stay if the BRC doubled his rent from $19,000 to as much as $40,000 a month, which is what the BRC quoted him the year before. "The real thing is they don't want me back," Kristal said, adding that there had been a series of disagreements between him and the BRC over renovations and building code violations in recent years.                                                                                                                                    
 

                                                                                          Hilly Kristal (left) with Steve Van Zandt (center) and Tommy Ramone (right)
addressing CBGB supporters [SHADOW photo by Jack Dawkins]  

On August 1, 2005, a combination press conference and concert was held at CBGBs to launch the"Save CBGBs" campaign. The gathering was organized and chaired by veteran musician and actor Steve Van Zandt, formerly of the E-Street Band and more recently part of the cast of the Sopranos tv show. Van Zandt called CBGBs "very simply the last rock and roll club left," and said that "CBGBs has historical significance because the genre of punk was created here."

Tommy Ramone told the crowd of over 200 CBs supporters: "When the Ramones first played here in the early 1970s, there was nothing here on the Bowery but CBGBs. Soon the scene developed and the Bowery started growing. Now, after 30 years, it has grown unnaturally. It's kind of ironic that the seeds of that growth were because the club allowed young talented musicians to create original music that nobody else allowed to be played. This is one of the last vestiges of what New York was, is and could be in the future." The press conference was followed by a concert that included performances by Debbie Harry, Jesse Malin, the Star Spangles, the Swingin' Neckbreakers, and Ted Leo + the Pharmacists.

On August 10, 2005, Judge Joan Kenney denied the BRC ‘s request to evict CBGBs on the premise that it owed $91,000 in back rent, ruling that the BRC failed to properly bill CBGBs. In her ruling, Judge Kenney declared: "CBGB has proven itself worthy of being recognized as a landmark […] a rare achievement for any commercial tenant in the ever diverse and competitive real estate market of New York City." She went on to say, "It would be unconscionable for this court to allow the petitioner to proceed with its intent to evict CBGB […] because it failed to notice that monies were outstanding for approximately four years."

The Bowery Residents Committee's board of directors is composed of representatives from the city's largest real estate, financial and banking concerns, including Citigroup, JP Morgan Chase, Cushman Wakefield (real estate developers), American Express, Merill Lynch, Columbia University, and Goldman Sachs. These are among the most influential corporations in the city that have a vested interest in changing the demographics of targeted neighborhoods as they gentrify them, driving up real estate prices and forcing lower-income people out.

The BRC is exempt from income tax under Section 501 (c) of the Internal Revenue Code and is eligible to receive contributions deductible as charitable donations for federal income tax purposes. However, according to its most recent IRS form 990 filing, the BRC has taken in $459,000 in rental income; in addition to the millions per year it has received in government grants. CBGBs supporters have questioned the BRC's ability to rent out a commercial space that it does not own on a "for profit" basis, in apparent violation of their not-for-profit status and corporate charter, and wonder if the BRC gets away with this through the connections of members on its board of directors.

As the August 31 lease termination date approached, Kristal made efforts to negotiate a new lease with the BRC that would address and resolve the concerns that the BRC expressed, but the BRC never responded to him. All other attempts by Kristal, including offering finding a third-party guarantor and raising money every year with benefit concerts, were unsuccessful

When August 31, 2005 came and went, Hilly Kristal refused to close his doors, and continued to do business as usual. Unfortunately, a few months later, Kristal announced an agreement with the BRC, under which CBGBs would pay the BRC $35,000 per month for one year and then vacate the premises at the end of October 2006.

On October 15, CBs held its last shows, ending with Patti Smith and Lenny Kaye. The CBGB Gallery next door to CBs closed on October 31. In December, CBGBs opened a boutique at 19-23 St. Mark's place (the former site of the Electric Circus in the 1960s), selling CBGBs clothing and paraphernalia. It is not clear what Kristal intends to do beyond this. In December 2005, he said that he was looking at potential locations for CBGBs in Manhattan and was considering Las Vegas as a site to open a sister club. "We're looking here and there, and we may have both places or we may only have one place," Kristal told CMJ.

In this current hyper-inflated real estate market, overbuilt luxury housing (rentals and condos) are taking the place of structures that are being demolished with no consideration of their cultural and historical significance, as gentrification along the length of the Bowery runs rampant. Among the historic buildings near CBGBs that have been torn down over the past six months are the original Minsky's Winter Garden Theater at 9 Second Avenue and McGuirk's Suicide Hall, a Civil War era building featured in Herbert Asbury's Gangs of New York, that was located at 295 Bowery, both only one block from CBGBs.

The killing of CBGBs by a greedy corporate-funded and tax-subsidized landlord is yet another example of artists and the counter-culture generating interest in a formerly undesirable section of the city and then getting pushed out by landlords and real estate developers looking to exploit that interest by attracting upper-income residents to the now "hip" neighborhood. Paradoxically, the wealthy residents so saturate the neighborhood that they destroy the very scene they are trying but can never be a part of!!

It remains to be seen what sort of business will pay $40,000 or more per month being sought by the BRC for CBGBs' space. With several new commercial storefronts next door and across the street from CBs already sitting vacant, CBGBs' space is sure to stay unoccupied for a long time.

If the public makes it known to any potential renters of CBGBs' space that an aggressive boycott campaign (and perhaps more) will be mounted against them, perhaps they will reconsider renting there.

[UPDATE: On August 28, 2007, Hilly Kristal passed away after a long battle with lung cancer. You can read the SHADOW obituary in SHADOW #52 or see it on-line by clicking this link.]

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GIVE THE BRC BASTARDS A PIECE OF YOUR MIND!!

BOWERY RESIDENTS COMMITTEE: 324 Lafayette Street, 8th Floor, NY, NY 10012; Phone Number: (212) 533-5700; Fax: (212) 533-1893; Email: info@bowrescom.org Website: www.brc.org

MUZZY ROSENBLATT – Executive Director
GENEVIEVE CHOW – JP Morgan Chase
ALEX COHEN – Cushman & Wakefield
RICHARD W. EADDY – E T Partners
ILENE FISZEL-BIELER – Citigroup
ALICIA GLEN – Goldman Sachs
LAWRENCE GRAHAM (Treasurer) – Brookfield Financial Properties
SIMON MILLER – Greenberg Traurig, LLP
ANTONIO X. MOLESTINA – Canadian Imperial Bank of Commerce
PHILIP R. PITRUZZELLO – Time Warner Inc.
CHARLES RAYMOND (Secretary) – Citigroup
JEFFREY B. ROSEN, Esq. – Arent, Fox, Kintner, Plotkin, & Kahn
JUDITH RUSSELL, Ph.D. – Columbia University
JULIE SALAMON (Chair) – Writer
MARC SOLOMON – Merrill Lynch
VIJU VERGHIS – Credit Suisse
MARCY E. WILKOV – (Vice Chair) American Express Company
RITA ZIMMER – Housing + Solutions