February 8, 2016

The mystery behind the savior of St. Mark’s Bookshop

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A couple weeks ago we wrote about the trials and tribulations of St. Mark’s Bookshop.

To recap: after leaving St. Mark’s Place in the 1990s, setting up shop in a new space owned by Cooper Union, fighting off a major rent hike by their gentrifying landlords, and ultimately fleeing the space at Cooper Square, the shop found fresh digs at 136 E. 3rd St off Avenue A. Their new landlord—the NYCHA—offered co-owners Bob Contant and Terry McCoy a chance to stay in the neighborhood at a relatively affordable rent, which they promptly failed to pay for the first 10 months of their lease.

The city sued, threatening to evict Contant and McCoy from their freshly renovated, award-winning storefront, if the store wasn’t able to pay the back rent, a seemingly impossible task for a business without enough capital to stock its shelves properly. Then, miraculously, and at the eleventh hour, a mysterious donor came to the rescue, promising to pay the back rent and assume responsibility for the lease, provided that Contant and McCoy raise enough money to restock the shelves and resume business as usual.

Wow! What a roller coaster!

Then, it gets stranger.

Brendan O’Connor at The Awl reports that this shadow benefactor is actually a collective of investors, organized by retired real estate mogul Charles FitzGerald and bookstore advocate Rafay Khalid.

Both FitzGerald and Khalid are interesting figures in their own right. Accord to O’Connor’s piece and a 2005 New York Times profile, FitzGerald has been a mover and shaker in the East Village real estate market since the 60’s, buying and selling several buildings while running his own businesses, Bowl and Boards and In the Woods. At one point, St. Mark’s Bookshop was one of his tenants. After retiring from the retail market, FitzGerald became a full-time landlord and devoted himself to conservation, buying up land in Maine and converting it organic farming. According to the Times profile, “He still loves the neighborhood, but he wants to use the income he could earn by leasing the store to buy land in Maine.”

So one of the figureheads behind gentrification of the East Village is now gallantly rushing in to save a bookstore driven to the brink of extinction by gentrification in the East Village.

Khalid, on the other hand, is an investment analyst and volunteer bookseller. In 2013, he was “instrumental” in the renovation and expansion of Baltimore’s Red Emma’s, a radical leftist bookstore which recently moved into that cities rapidly changing Station North Arts District. Then Kahlid was acted as a go-between for the worker-owners of Red Emma’s and The Working World, a financial initiative that offers loans and lines of credit to worker-owned businesses around the world. Now, along with FitzGerald, he hoping to raise over $200,000 in an effort to keep St. Mark’s afloat.

So, where exactly does that leave us? And what exactly are Khalid, FitzGerald and their anonymous investors buying with their stacks-on-stacks?

According to The Awl:

What Khalid and FitzGerald propose, and what they hope the city will agree to, is a new lease, with a new company—under a new name, Khalid said repeatedly—that will pay a higher rent than it is currently paying. In return, it will forgive the back rent. FitzGerald, any investors, and a management committee will direct how to allocate any funds raised, including whatever is left of the money Khalid hopes to raise. (St. Mark’s Bookshop is also running a Gofundme with a $150,000 target.) “I think of this as a startup,” Khalid said. “St. Mark’s 2.0.”

Folks with more business savvy than myself can correct me if I’m wrong, but this doesn’t sound like Khalid and FitzGerald are saving St. Mark’s Bookstore, so much as they are taking it over and changing its name. That’s not philanthropy, that’s a buyout.

Perhaps this is a niggling distinction, and perhaps we should just celebrate the unlikely survival of a literary landmark. But there’s something distasteful about shadow money, which we revile when it’s meddling in luxury real estate or congressional elections.

Moreover, what about the hundreds of crowdfunders donating tens of thousands of dollars that have stocked the shelves and paid for moving fees twice in the last two years? Are they investors? Will they be invited to this “management committee”? That remains to be seen. But whatever success St. Mark’s manages to achieve, and whatever revenue it generates for FitzGerald and his backers in the years to come, it will all have been in no small measure due to the efforts of this equally anonymous but infinitely less powerful group of readers and citizens who have fought for the store’s existence.

Editor’s Update:

Since Friday—when this story was written—St. Mark’s Bookshop has been served with a warrant by the New York Department of State for a $34,408.76 tax lien. The bookstore appears to be in its final hour. The only way to amend this situation is to pay the bill in full or to file for bankruptcy, and while Khalid and FitzGerald have been discussing taking the store over and hiring Contant and McCoy as salaried staff, no paperwork has been signed. As FitzGerald told The Awl: “It cannot be revived unless there’s a clean slate.”

James West, the shop’s lawyer, told Nicole Disser of Bedford + Bowery: “They were served with a Marshal’s Notice about a week ago. The people they owe money to are, among others, the State—there are some taxes due—but there are some other creditors, one of them was a book distributor. That was the pressure point. The State doesn’t usually play games. That was pretty much it.”

Correction:

2/22/2016: Please note that the original post has been amended to clarify that FitzGerald and Khalid are hoping to raise $200,000 towards revitalizing St. Mark’s Bookshop—the funds are not readily available.

 

Simon Reichley is the Director of Operations and Rights Manager at Melville House.

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