(Bloomberg) -- Manhattan’s first freeport, a windowless five-story warehouse in Harlem designed to store $2.5 billion worth of blue-chip art, is closing after two years.
Named Arcis, which means stronghold or citadel in Latin, the building was developed by Cayre Equities at a cost of more than $40 million and includes 110,000-square-foot of space and security features such as retina scanning. It was built on a lot designated as a foreign-trade zone, meaning that the merchandise inside isn’t subject to U.S. duty or excise tax.
“After careful consideration we have decided to close Arcis permanently,” Executive Director Roxanna Zarnegar said in a letter to clients, a copy of which was viewed by Bloomberg. She didn’t specify a reason, but asked customers to make arrangements to remove items from storage immediately. The final day of operations will be Oct. 31.
Zarnegar didn’t respond to an email and calls seeking comment.
Freeports have become essential to the global $64 billion art trade, creating a legal way for dealers and collectors to avoid paying duties and taxes on artworks, whose prices can routinely run into millions of dollars. These high-security warehouses operate from Geneva to Delaware to Singapore, helping the rich stash their valuables.
The coronavirus pandemic has hit the art industry hard, with fairs postponed, galleries closed and auction sales declining dramatically. Organizers on Wednesday canceled Art Basel Miami Beach, the largest contemporary art fair in the U.S. that was scheduled for December.
The freeport on West 146th Street stood out in the neighborhood, located next door to the Greater Hood Memorial A.M.E. Zion Church and across the street from a bus depot.
Read more: Picasso finds possible digs in Harlem
Cayre was marketing the building last year, valuing it at about $60 million, or $545 a square foot, Real Estate Alert said in March 2019. The industry newsletter said the developer would consider proposals for an outright sale, a recapitalization or the sale of a leasehold interest.
James Coakley, president of Treasure Island Management, another company controlled by the Cayre family, said Arcis isn’t currently listed for sale, but declined further comment. Cayre Equities specializes in self-storage buildings and retail in New York and New Jersey.
