Photographer Annie Leibovitz Could Lose Property After Renovations Went Awry

The former owners of two 19th-century homes in Manhattan's Greenwich Village said they regret selling them in 2002 to photographer Annie Leibovitz, who is in danger of losing the properties in a $24 million lawsuit.

"Big mistake," said Jay Furman, who was part of a small investment group, FYH Village LLC, that owned adjoining three-story houses built in the 1830s. "It was a gorgeous building. It had original floors. The fireplaces were spectacular."

Leibovitz embarked on extensive renovations of the buildings at 755-757 Greenwich St., which she planned to combine into a single 9,000-square-foot live-and-work space, according to documents filed with the New York City Landmarks Preservation Commission.

The renovations dragged on for years, igniting opposition by the Greenwich Village Society for Historic Preservation and a $15 million lawsuit against Leibovitz by her next-door neighbor. In September 2003, Leibovitz settled the suit by buying the neighbor's building for $1.87 million.

These three properties contributed to the "dire financial condition" that led her to seek a $24 million loan from Art Capital Group, which lends money using art as collateral, according to a lawsuit filed July 29 in New York State Supreme Court in Manhattan.

Leibovitz backed the loan with rights to her photographs, the Manhattan properties and a house in Rhinebeck, a leafy enclave about two hours north of New York, according to the suit. Art Capital, based in New York, is suing the photographer for breaching a contract that allows the company to sell the properties and photographs' copyrights even before she is due to repay the loan on Sept. 8, according to court papers.

FYH Village bought the two properties in January 2001 for $3.3 million, according to records filed with New York City's Finance Department. In April 2002, the company sold them to Leibovitz for $4.15 million, Charles Yassky, another partner, said in a telephone interview.

"It was such an unusual and charming property," Yassky said. "And being a developer in New York, you don't often come across something like that."

Leibovitz, 59, is the creator of famous photographs, including a nude of John Lennon in a fetal position with Yoko Ono, and a portrait of a pregnant, naked Demi Moore published on the cover of Vanity Fair.

Renovations to the West Village buildings went awry. In October 2002, cellar excavations, done without a work permit, undermined a shared wall with a neighboring house, according to a violation issued by the city's Department of Buildings. A chimney collapsed, filling the building with gas and forcing its owners to evacuate, said Andrew Berman, executive director of Greenwich Village Society for Historic Preservation.

During the next year, the group complained about deterioration of the three structures, which were left exposed to the snow and rain, Berman said. On the first anniversary of the renovations, group members and local residents picketed outside the properties, with signs that read "Hit & Run Annie."

The $6 million Leibovitz spent overall for the three red-brick, vine-covered houses, located across the street from a popular gastro-pub, the Spotted Pig, was only the start of her mounting costs.