Cracking the Case of the Mystery Safes in the Speakeasy Basement

This week, we continue with our series of longer pieces unraveling the histories of storied buildings.

If you walked into a building expecting to see a regular museum, but found an apartment-sized living room with minimal, seemingly random paraphernalia, unremarkable oil paintings and posters on the walls, and a $20 admission charge, what kind of review would you post on TripAdvisor? Would your visit even be long enough to merit one? And yet 56 of 70 reviews for the The Museum of the American Gangster, on the second floor of 78-80 Saint Marks Place, described it as “excellent” or “very good.” Half the reviewers on Yelp gave the place five stars. The glowing assessments have something in common: they all caution the visitor to get over any initial disappointment and enjoy the guided tour.

I walked into the museum’s living room on a cold November afternoon to find a tour already in progress. The tour, in fact, is the museum; one cannot just roam the place on one’s own. The guide, an eloquent man in his 30s named Bob McSmith, was starting to give an overview of New York’s notorious gangsters whose portraits cover the walls. Their stories, of illegal activity, dirty politics and either sheer luck or its dramatic opposite, have enthralling details. Once a few more people came in, McSmith took a break to collect the payments: Cash only, but not a problem if anyone is a few dollars short. For students, there’s an $8 discount.

My eyes searched the room for a man who I imagined had the look of a Quaker, but the museum’s proprietor, Lorcan Otway, was not in that day. The Otways have owned the building since 1964, longer than anyone else in its 186-year history, and it is his meticulously, somewhat obsessively researched narrative that the museum is built on.

In addition to the Museum and the Otway residence upstairs, 78-80 St. Marks houses Theater 80, one of the last off-off Broadway stages in the city, and the William Barnacle Tavern, officially registered as Schieb’s Place Inc., named after a small-time immigrant mobster who ran a speakeasy in the space for the bigger guns during the Prohibition Era. Together these establishments enrich the history of one of the oldest and most storied buildings in the East Village.

https://www.yelp.com/biz/museum-of-the-american-gangster-new-york?sort_by=rating_desc

I finally caught up with Otway a month later at the William Barnacle, which can be accessed from 78 St. Marks or through the Theater at 80. Otway is dressed as I suspected he would be in a simple gray flannel suit and wide-brimmed black hat, a trimmed sideburn-to-sideburn beard framing his face. He has spent decades grooming his building narrative, mindful of the difference between stories and history. With repetition, he tells me, errors become inevitable; oral accounts and folk history intertwine; actors who moonlight as tour guides can sometimes get overly inspired; and facts and myths swarm all over each other. The Apocrypha runs through the stories I’ve read about the building, appearing in everything from the New York Times (in 2010 and then again in 2015), to the Wall Street Journal, to the Guardian, and Smithsonian Magazine. But that is precisely why fact-checking this place is such a delight.

* * *Otway is sort of famous, at least in the neighborhood. He is one of “the 13 people you meet on St. Marks Place,” as noted by B+B reviewing St. Marks Is Dead, a recent book about this “coolest” of New York streets. Born Lawrence Otway in 1955, he is one of two sons of Howard and Florence Otway, a theater professional and his shoe designer wife. Lawrence-now-Lorcan grew up on St. Marks Place after his father bought the two adjacent buildings from Walter Schieb. At a time, the street was a meeting point for activists and artists of the radical sort, but it is the earlier period that became Otway’s obsession: the New York of gangsters and bootleggers of the 1920s and ‘30s. Otway is convinced of the significance of his own building within this history and has made it the cornerstone of his business. For the past seven years, he has also been working on a book that will tell the history of the lot and the building from 1630 to present.

The sheer historicity of 78-80 St. Marks Place is easily verifiable. Located between First and Second Avenue, it is one of the older addresses in the East Village. Even though the NYC Zoning and Land Use database indicates the year built as 1920, atlases in the New-York Historical Society collection indicate two joint four-story brick buildings with a common basement. The deed that was transferred from Florence to Lorcan Otway in January 2010 describes the earliest record of the plot as “part of the real estate late of Nicholas W. Stuyvesant . . . and made by Samuel Doughty, C.S. dated May 1834, and filed on April 24, 1835.”

The person who gave the name St. Marks Place to the stretch of 8th Street between Third Avenue and Avenue A was Thomas E. Davis, who purchased all that property from Stuyvesant in 1830 with the intention of developing it. Davis had to rename the street, both because he claimed an extra 76 feet in width to build on (which later became the subject of the Supreme Court case Ward v Davis) and to give this up-and-coming area a little panache, like that of adjacent Astor Place.

An “elegant residential block” in the 1830s, St. Marks Place became home to a number of New York notables. In 1833, Col. Alexander Hamilton, son of the founding father, purchased 4 St. Marks Place. Writers, lawyers and doctors were among the other inaugural residents. The earliest continuous inhabitant of 80 St. Marks was Andrew S. Garr, a leading lawyer of the period, who moved from just a block away, at No. 23, in 1847. His rent was around $700 a month, at least initially, judging from the “To Let” ad for the building in the Morning Courier in 1846, which advertised “a three story basement and attic house, finished in the best style with tea room attached, and supplied with a bath and kitchen.” That would be well over $15,000 a month today. But by 1852, given the area’s proximity to New York’s most impoverished residents, the New York Times had already declared “the neighborhood has become of late a much less desirable location than it was formerly, from the frequent occurrence of heart-rending scenes which daily transpire in the vicinity.” Garr moved out of the building in 1853, as did many of the street’s other wealthier dwellers.

* * *

It is not clear if a single family ever occupied the building for long between the second half of the 19th century and the early 1920s (the building was put on sale in 1846 and 1860), but based on newspaper records, it is safe to assume the inhabitants were a mixed lot. Thanks to a November 19, 1860 edition of the New York Morning Courier, we know that the building housed a shop. Charles Webber, a 35-year-old German, was arrested on complaint of his employer, Mr. Thompson, who accused him of stealing 500 gas burners and some tools, valued at $250.

In April 1869, the owner at the time, J. Delaney, listed separate rooms available “in a first rate tenement house, $20 per month.” This was two years after the city adopted the 1867 Tenement House Act to help alleviate a residential crisis that emerged as the city’s population ballooned by 25 percent. In 1865, the city’s population had reached nearly a million inhabitants and the total number of tenement buildings stood at over 15,000.

Throughout the coming decades, the population at 80 St. Marks Place diversified. A G. C. Richter offered violin and piano lessons in 1878. A “respectable widower” living on the first floor placed a want ad for a housekeeper in 1879. In 1884, police arrested a barkeeper named George V. Welterean, who also lived in the building, after a fight in his bar left a 13-year-old boy dead. A young man sought employment as a shipping clerk in 1894. Herman Lehmann, another bartender, lived in the building in 1895. A German girl who lived on the second floor and described herself as “neat and clean” looked for housework in 1902. A Professor Sorisi offered Italian lessons in 1910. A 20-year-old bookkeeper named Fischer was looking for a job in 1917, and 24-year-old stenographer named L. Allwell did likewise in 1925. This period is also when German, Jewish and Polish immigrants settled the neighborhood in large numbers, mixing with or replacing those of Scottish or Irish descent and turning St. Marks into Kleindeutschland.

* * *

The apogee of Otway’s museum (and book) narrative begins right about here, in the early 1920s, with Prohibition and the gangsters. As the tour guide tells it, this was a period of “equal violence on both sides,” the law and the gangsters. Otway has by and large written the text of the tour, which shows the influence of his Quaker faith. He likes to say that he grew up in organized crime, by virtue of being from a family that belongs to the Religious Society of Friends. “Every generation of Quakers since the 1660s have broken the law in large numbers because of our faith,” he said. Otway himself was involved in the anti-conscription movement, “the second Underground Railroad,” helping draft resisters escape to Canada. As a result, he says, his “abstraction of organized crime and gangsters may be broader than others’ because we were breaking very serious law.”

The portraits on the museum walls are mostly of leading gangsters from New York and Chicago. To counter the “wide misconception that all gangsters were Italian,” the tour guide focuses heavily on Jewish bosses, chief among them Arnold Rothstein, who set up an illegal casino and stole a a World Series instead of becoming a rabbi. The way Otway sees it, “Italians and Jews in America were only conditionally white in American history,” and their story in this era is one of marginalization. When these people chose to go into organized crime, Otway said, “it wasn’t a glass ceiling, it was a brick wall for Italians.”

Prohibition nurtured the millionaire gangsters of the era, who offered their protection for the large illegal shipments of alcohol coming into the city from Canada and Bermuda. The smuggling network funded the speakeasies and brothels and as Prohibition ended in 1933, Otway’s surrogates say that Rothstein’s gang controlled two thirds of the alcohol coming into New York.

The second half of the tour guides visitors to the theater and bar downstairs and into the basement, which both reporters and online commenters find the most fascinating. 

As McSmith recounts it, the story begins with Frank Hoffman, “a bootlegger from Bavaria and a close associate of Al Capone.” Hoffman, who owned several buildings in the city through shell companies, wanted to establish a glamorous speakeasy. He purchased the building in 1920, made the front of it inconspicuous, cutting off all access from St. Marks Place. (There is no public record that shows either Hoffman or Scheib as an owner of the lot. Property documents housed at Municipal Archives show that between 1920 and 1938, there were seven conveyances of the building for six different grantee companies.)

Hoffman hired a local butcher, Walter Schieb, the namesake of Otway’s business, to run his nightclub through his butcher shop on the corner of St. Marks Place and First Avenue. This bit is from the Theatre’s webpage:

Scheib’s Place, the Speakeasy at 80 Saint Marks Place was where the New York City Council drank during Prohibition. Today one can find evidence of every aspect of the defense and camouflage of the hidden bar from the iron fittings that held steel plates over the windows to the bomb triggers in the basement – the final defense if the club was raided. At the top of the organization running Scheib’s Place was a Bavarian bootlegger named Frank Hoffman. Hoffman made tens of millions of dollars during the Prohibition. The public face of the club was the restaurateur Walter Scheib, from the Ukraine.”

McSmith explains that the only way to get into the nightclub was to walk through the butcher shop and its meat locker, following two alleyways and going down into the basement, where a patron would be asked for a password and, once delivered, would be let onto the dance floor. “For years, residents of the area watched people dressed up in their fanciest night attire walk into the butcher’s shop, then walk out hours later, drunk and stumbling, carrying no meat.” It wasn’t just the residents—the police also knew about the butcher’s speakeasy, but could not bust a place “where their chief was a regular.”

Hoffman ran his club without incident until 1932, when he apparently decided to visit his family in Bavaria, the tour guide told the visitors. The year 1932 turned out not to be a good one for a trip to Germany. Hermann Goring was elected Chairman of the Senate, and in the federal election in July, Adolf Hitler’s National Socialist German Workers gained more than 37 percent of the popular vote to become the strongest party in parliament.

In December 1933, the 18th Amendment was repealed. Schieb now ran the business by himself since Hoffman did not immediately return from Germany. Schieb put up a sign for “Schieb’s Bar,” announcing one of New York’s first legal bars. His liquor license notification appeared in the Irish Advocate in April 1934. The first mortgage for the building was filed in 1938 for $12,000 with a 4 percent interest rate. The grantee in 1938 is Mulbach Rlty Co.—the same name as Schieb’s birthplace.

Schieb ran his establishment for the next three decades. Despite modest profits, Otway said, there was a good reason Schieb could never let go of this place. Hoffman had left two huge safes in the basement and Schieb believed they contained some $12 million in ill-gotten gains. Schieb was fearful that he might face prosecution for tax evasion if the money were used, and just as fearful of Hoffman, who was known to have a few psychopathic tendencies. So Schieb left the safes untouched for the next 30 years.  

Schieb had a fall guy in Lorcan Otway’s father, Howard Otway. In 1964, Schieb’s Mulbach Rlty Co. offered him a $60,000 mortgage at six percent interest against a $64,000 purchase price, as indicated in property records. Otway at the time was a young actor who wanted to open his own theater. Given the times, and the dangerous place St. Marks had become, this was a bad business idea. Otway, nonetheless, was undeterred. For his part, Schieb reasoned that the theater business would fail, and that the building—and the mysterious safes—would revert to his control.

Otway started renovating the space to put in a theater. He applied in 1966 to make the necessary changes for a capacity crowd of 250 people, including water and gas permits, a permit for a place of assembly (theater, eating and drinking establishments, dressing rooms, offices, clubrooms). Theatre 80 still uses the fixed red chairs that Otway installed at the time. 

In the process of renovation, Otway’s father indeed found the two safes. His son said he knew the history of the building, and understood that Scheib probably had ties to the underworld. So he called Schieb to come and open them. Schieb told Otway that the safes belonged to him, but that he had forgotten the combination and what was inside. He returned the next day with a professional safecracker. It took them six hours to open the first one, which turned out to be empty. The second safe, now on display upstairs, emitted a hideous odor. Inside were decades worth of old decayed food and trash, a few packs of cigarettes, posters, and money. How much money? Two million dollars in gold certificates, wrapped in a newspaper dated 1945. Schieb pocketed the $2 million that day and subsequently moved to Florida. He would die 30 years later in Dade County on October 31, 1994, a few months after his 94th birthday.

Up until the point we met, Otway had been convinced that at some point in 1945, Hoffman robbed his own safe in cahoots with a Brazilian actress accomplice (he was “obsessed with Brazilian women”) and an unidentified second man. No US death certificate is on record for Frank Hoffman, but Otway harbors a theory that the third accomplice murdered his two partners. So when I mentioned to him that during my own research I had seen a news story from 1945 about a robbery at Schieb’s Place, Otway became incredibly excited.

A few days later, I sent him the clip from the November 5, 1945 edition of the New York Sun: “Three men who entered Scheib’s bar and grill at 80 St. Mark’s Place, apparently with a pass key early today, took $4000 from a safe which they knocked open after overpowering and binding the night porter, Jacob Pankowitz, 65 years old, of 97 Seventh St.” Otway e-mailed me back immediately, thanking me three times within two lines. Then he e-mailed me again: “My head is spinning with the description and the timing. Genie and I are working on the implications… Major thanks coming in the thanks pages at the end of the book…”

As for the rest of the story, just as Schieb predicted, Howard Otway’s original theater venture was on shaky ground until 1967, when its very successful production of “You Are A Good Man, Charlie Brown” saved it. Today the theater continues to stage several plays a year, ranging from Shakespeare to avant-garde. Head there this and next month to see a comedy show by the Australian duo, The Umbilical Brothers, or Beverly Hills 90210, the musical. Don’t forget to stop by the tavern to enjoy a Prohibition-style absinthe drink, and say hello to Lorcan Otway if you spot him. He is hard to miss.