This one begins, like a dime detective novel from the nineteen-thirties, in a dingy bar in lower Manhattan. And, like a lot of New York stories, though it may touch on history and backroom politics, sex and the supernatural, though it throws together billionaires and scrap-lumber salesmen, city councilmen and scholars of the occult, it’s mostly about real estate—and the stubborn allure of old buildings and their secrets.

Ten years ago, a bar owner named David McWater took out a lease on a building at 211 Pearl Street. It was a plain brick structure in the Greek Revival style, with granite pillars along its base and a thin classical cornice. Its windows, three to a floor, once had sweeping views of New York Harbor—out across church spires and wooden piers, steam ferries and sailing ships, to the orchards and farms of Brooklyn. Now they looked out on the canyoned streets of the financial district. A family from New Jersey had owned the building for decades and had allowed it to fall into disrepair. The floors were layered with plywood and carpet, the walls with wood panelling. (The first floor had been an Irish bar called Rosie O’Grady’s.) Next door, at 213, the building it leaned against was in even worse shape: a jagged crack ran down the length of one wall, it was later discovered, slowly separating the façade from the sides.

Still, it was a sweet deal. The building at 211 had five floors, the rent was only five thousand dollars a month, and the lease was for twenty years. It was strictly a commercial property, and McWater was required to fix it up, but he had planned to do so anyway. His two partners, Ray Deter and Dennis Zentek, owned a popular beer bar in the East Village. They wanted to re-create the bar on a more lavish scale, with exposed brick and antique fixtures. It would make an elegant speakeasy, they thought, for young bankers and lawyers—a ghost of the neighborhood’s past.

Dave and I have known each other since our high-school d...