By Sabina Mollot
Coveted Gramercy Park apartments once hoarded by the leadership of the tony National Arts Club will be pegged with open market rents.
But they won’t be available to just anyone who wants to live in the city oasis.
Following a lengthy investigation into the club and its former leader Aldon James, the Attorney General has reached a settlement that will allow the Club to transition to what he called “a new chapter in its history,ˮ with a new Board of Governors and stronger governance and financial controls.
As part of the settlement, the club must make apartments “equally available to members at no less than fair market value.ˮ
Of 14 apartments once controlled by former NAC president Aldon James, 10 are being gut renovated after being turned into pigsties by James, his twin brother John and friend Steve Leitner.
Inside, the dilapidated rooms — some with gaping holes in the walls — were littered with trash and trinkets piled high. One bathroom floor was caked in feces and urine and cockroach traps covered the tiles.
Four of the apartments are still controlled by James and his cronies, although sources said they have not been seen there since James was ousted as president.
Attorney General Eric Schneiderman filed a lawsuit against James following an 18-month investigation into allegations he had looted the non-profit, using it as his personal piggy bank.
According to the A.G., James’ “years of self-dealing” resulted in more than $1.75 million in lost income from the meals he ate free almost daily at the club and at restaurants to the taxis he was shuttled around in to his many flea market, gallery and vintage store purchases he made with club funds.
The investigation also found James “systematically abused his authority in order to reap substantial personal benefits, principally for himself and his twin brother, John James.”
This was in reference to his taking over more than a dozen apartments, offices and other rentable club spaces, which he and his brother used for years without paying any rent.
His activities “deprived the club of at least $1.5 million dollars in rental income it could have obtained in the past six years alone,” the Attorney General’s report said.
“For years, Mr. James took advantage of his role as the leader of the National Arts Club to deprive the organization of valuable assets that should have been used to advance its charitable mission,” Schneiderman added. “The time has come for real accountability. Our message is loud and clear: You serve your organization; the organization isn’t there to serve you.”
The lawsuit calls for the club’s former leader of a quarter century to pay back $2 million to the club and to prevent him for ever serving as an officer or director of any New York not-for-profit corporation.
Out of the $2 million, $274,000 had been taken improperly from the Kesselring Fund, the A.G. said, which is a restricted endowment of the club intended solely to support the dramatic arts.
Three-quarters of the governors who served at the time the start of the investigation have stepped down or been replaced; the remaining governors, including current Club President Dianne Bernhard, will step down at the end of their terms next May. In a statement, Bernhard said, “It’s now time for all of us to get our focus back on art, our mission and sharing our rich resources with the world.”
Bernhard began her tenure as president in May, 2011, after serving on an interim basis for two months when James stepped down for a “vacation,” following a bizarre incident involving dozens of dead and dazed finches, like the ones he kept in the club, in Gramercy Park.
The club also said in a press release that the A.G. will not be taking any action against the club, since the board has already begun the process of reforming the nonprofit and registered charity’s leadership and made its finances more transparent.
Three attorneys representing James did not respond to requests for comment.
However, one of them, Gerald L. Shargel, denied all accusations to the New York Times and said the new suit was due to pressure from James’ opponents.
Gramercy Park has long been a haven for a well-heeled, artsy crowd whose residency secures them a key to one of only two private parks in the city.
The 25th Governor of New York, Samuel Tilden lived in what is now the Arts Club and other noted residents have included the Shakespearean actor Edwin Booth — who founded the neighboring Players Club — movie star John Barrymore and circus legend Alfred Ringling.
Today, Gramercy Park residents include actress Julia Roberts, Kate Hudson, Rufus Wainwright and Amanda Lepore.