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Category ArchiveNew York City Planning Commission

Rudin Wins Back $350K in Real Estate Taxes From City: Judge

The city owes Rudin Management Company $350,000 plus interest in real estate taxes collected for a public park Rudin donated to the city, a court has ruled.

The Supreme Court of the State of New York judge said in his Jan. 16 decision, made public last Wednesday, that the developer should not have been held responsible for paying taxes on a public park for the 18 months after the city had taken over its operation even though the city had not officially received the deed for it.

Rudin’s attorney, Joel Marcus of law firm Marcus & Pollack, said the judge supported his argument “that the handover and dedication of the park had the same legal significance as a deed conveyance as far as exemption was concerned. Notwithstanding that legal argument, even if taxable, it was of zero value because of the easement agreement in favor of the city; so that no tax should have been collected during the period of the Rudin ownership and the two tax years appealed.”

The issue dates back to April 2011 when Rudin and  joint venture partner Global Holdings bought the Hudson Square submarket site where St. Vincent’s Hospital had been (it closed in 2010) out of bankruptcy for $260 million, according to court documents and The Wall Street Journal. That included one site on which North Shore-LIJ would erect a medical facility, one where Rudin would build  The Greenwich Lane residential condominium at 155 West 11th Street and one for a triangular-public park, St. Vincent’s Triangle.

In March of the following year, the New York City Planning Commission gave Rudin the green light for the project so long as the company “convey[ed] an easement to the city for perpetuity for use of the park as open public space…surrender[ed] all future development rights for the park space” and “convey[ed] title to the park to the city parks department upon substantial completion of the park,” among other conditions, court documents indicate. It was later determined that St. Vincent’s Triangle, across from the former St. Vincent’s Hospital main campus at 7-15 Seventh Avenue would include an AIDS memorial sculpture.

Rudin built the park and handed it over to the city gratis on Aug. 21 2015 (with the city and Rudin issuing a joint press release about the park’s opening), but the city did not take the deed until Feb. 15, 2017, when the sculpture—for which the city paid $3.6 million—was done. During that 18-month period the city “was in full control of the park…and it was open for public use, but the city refused to take formal title by accepting a deed from” Rudin, court records indicate, because the sculpture wasn’t completed.

The city maintained that so long as the property was technically in the name of the developer it was fully taxable, but Rudin’s attorney argued that the property was restricted to park use in perpetuity and had “no potential for private sale or income production” because the title was committed to the city, so the “value should be assessed at zero,” according to the recent court filing.

A Greenwich Lane spokeswoman responded to a request for comment on the case with the following statement: “We are proud to have built and donated this beautiful community park to the City of New York, which includes the land that the NYC AIDS Memorial sits on. The park, which opened to the public in 2015, is a gathering place for all New Yorkers to enjoy.”

New York City Law Department, the attorney for the city, didn’t immediately respond to a request for comment.

Source: commercial

City Planning Approves Zoning Change, Allows Construction of Sutton 58 Resi Tower

The City Planning Commission on Wednesday approved a revised rezoning proposal that aimed to cap the scale of Gamma Real Estate’s planned 800-foot-tall residential tower at 3 Sutton Place and limit the scope of future skyscraper development in the Sutton Place area.

Both proponents and opponents of the proposal—brought forth by the East River Fifties Alliance and certified by the CPC on October 2—scored small victories with the decision, ahead of it being advanced to the City Council for consideration.

Under the revised proposal’s stipulations, any new development in Community District 6—from east of First Avenue and north of East 51st Street—that’s allocated more than 25 percent of its total floor area to residential uses will have to follow “tower-on-a-base” requirements, which mandates that 45 to 50 percent of the building must be built below 150 feet. The initial rezoning proposal the ERFA introduced in June 2016 called for a 260-foot height restriction and the inclusion of a significant portion of the tower to affordable housing.

With the vote, Gamma President Jonathan Kalikow tallied a small triumph in what’s been a two-year-long battle over the acquisition and development of the site. The CPC voted to grandfather Kalikow’s project, adding a provision that exempts buildings currently undergoing development in the area. This allows his firm to proceed with construction on its planned 67-story tower dubbed Sutton 58—located at 430 East 58th Street between First Avenue and Sutton Place—while halting any future similar development in the area.

Still not satisfied, Kalikow, who’s been a staunch opponent of the by products of the proposal, saying it sets a bad precedent for future development across the city, said in a statement, “While we wish that the City Planning Commission had rejected the ERFA’s application outright, we appreciate that they have decided to grandfather our project, which will not only ensure that our as-of-right development can move forward, but also protect the jobs of the hundreds of workers who are relying on construction of our building to move forward.” Kalikow will move to complete the building’s foundation before the proposal reaches City Council so to safeguard the project from any possible amendment to stop its construction.

Councilman Ben Kallos, who represents the residents of Sutton Place and cosigned the ERFA’s proposal, told CO after the CPC’s vote that although he’s ultimately pleased with the result, there’s more to do.

“I’m grateful that this matter has been addressed by the CPC as this has been a years long process,” Kallos said. “We received public guidance from CPC and followed that guidance, putting forth tower-on-base provisions. I’m grateful they voted it out. We now must move as quickly as possible through the city council as there’s a race afoot.

“I do not believe the zoning area should be grandfathered [to allow Gamma’s development],” Kallos added. “I intend to recommend it be removed, and I hope to pass it out of the council without any grandfathering clause.”

Kalikow added: As this application now moves to the New York City Council for a vote, we call on our Council Members to also put aside the politics and influence of the handful of New Yorkers who are leading ERFA’s self-interested charge and consider these many more lives who are depending on our project. We hope that they will follow the CPC’s suit in allowing us to continue with our development.”

The ERFA argued in its proposal that the development restrictions “would more closely align future construction with the existing built environment, while still accommodating reasonable growth.”

ERFA President Alan Kersh called the CPC’s decision to grandfather the development “inappropriate,” adding in a statement that “the Commission should have approved the zoning change as it was presented and left any decision about grandfathering the Gamma project to the Board of Standards and Appeals.”

Real Estate Board of New York President John Banks told CO just before the CPC’s October 18 hearing of the proposal, “[This proposal] would provide an opportunity for people who have the means to mount a challenge to try this method of spot zoning going forward… it becomes a tool for people to use against any undesirable development. We’re concerned that there is no comprehensive planning that would take place if this becomes more of a norm.”

The ERFA’s proposal is backed by several community representatives, including Manhattan Borough President Gale Brewer and Kallos. New York State Senator Liz Krueger has cosigned the proposal, and recently, New York Congresswoman Carolyn Maloney signed on in support of the ERFA’s mission, having already written and voiced concerns to the CPC on the organization’s behalf, according to an ERFA spokeswoman.


Source: commercial

City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development

The New York City Planning Commission yesterday held its first hearing on a revised rezoning proposal that aims to limit the scope of Gamma Real Estate’s planned project at 3 Sutton Place.

On October 2, the city certified the new proposal, which allows Gamma to move forward with construction on its planned 67-story, 800-foot-tall residential tower now called Sutton 58—located at 430 East 58th Street between First Avenue and Sutton Place—without the need for an affordable housing component or height cap.

The proposal, brought forth by the East River Fifties Alliance (ERFA), would force Gamma to follow “tower-on-a-base” requirements, which mandates that 45 to 50 percent of the building must be built below 150 feet. The initial rezoning proposal the coalition introduced last June called for a 260-foot height restriction and the inclusion of a significant portion of the tower to affordable housing.

“In their previous proposal, they alleged an affordable housing element. They ended up taking that part out,” Gamma Principal Jonathan Kalikow told CO. “This new proposal really shows their true colors.”

kalikow rally pic City Planning Holds First Hearing On Fate of Gamma Real Estate’s Sutton Place Development
Gamma Principal Jonathan Kalikow speaks in front of construction workers at a rally prior to the hearing. Photo: Mack Burke for Commercial Observer

Prior to the hearing, Kalikow organized and led a small rally in front of City Hall and marched to the Department of City Planning’s offices at 22 Reade Street with labor activists and roughly 20 construction workers carrying signs with messages such as “Preserve Jobs, Not Views,” “No ERFA Backroom Deal” and “Stop Spot Zoning.”

“At the end of the day, people understand this is not the New York City way,” Kalikow told CO while he and his group of supporters were en route to the hearing. “We had a viable process. The fact that we were railroaded, you know, no citizen should want to see that.”

The ERFA wrote in its revised proposal that “the combination of these [new] rules would more closely align future construction with the existing built environment, while still accommodating reasonable growth.” The community coalition consists of 45 area buildings and roughly 2,600 individual supporters who live in approximately 500 buildings in and outside the proposed area of rezoning; it was formed in 2016, shortly after the first announcements of the development, to oppose and combat the construction of Sutton 58. 

Mayor Bill de Blasio’s administration has championed the expansion of affordable housing throughout all five boroughs, but he, as well as the City Planning Commission, opposed the ERFA’s original rezoning proposal, which was backed by several community representatives, including Manhattan Borough President Gale Brewer and Councilman Ben Kallos, who represents the residents of Sutton Place. New York State Senator Liz Krueger has backed the proposal, and recently, New York Congresswoman Carolyn Maloney signed on in support of the ERFA’s mission, having already written and voiced concerns to the CPC on the organization’s behalf, according to an ERFA spokeswoman.

Opponents of the ERFA’s new proposal who testified at the hearing included construction workers from the two companies tapped to build the property—Lendlease, to oversee the project, and Urban, for the building’s foundation—charged with building the project, representatives of New York’s real estate industry, Gamma’s legal counsel and even some residents of the Sutton Place area, who claimed that the bill simply doesn’t benefit the public and only sets a bad precedent for rezoning efforts going forward. They argued that the plan is an effort to spot zone this one property, that it goes directly against de Blasio’s plan to expand affordable housing throughout the five boroughs and that it will also take work away from construction companies as well as inhibit the growth of neighborhood economies.

“The Mayor was very clear about it when he attended a town hall on the Upper East Side a couple weeks ago: [this proposal] would provide an opportunity for people who have the means to mount a challenge to try this method of spot zoning to go forward… it becomes a tool for people to use against any undesirable development,” Real Estate Board of New York President John Banks told CO. “We’re concerned that there is no comprehensive planning that would take place if this becomes more of a norm.”

Members of the ERFA and Kallos said that their efforts don’t constitute an attempt to spot-zone the property and that their rezoning application addresses the entire zoning area. The ERFA, backed by Kallos, wants to take its fight city-wide to stop super tall residential skyscrapers.

The proposal’s supporters at the hearing included elected officials and spokespeople for elected officials, ERFA representatives and residents of Sutton Place. They argued that the community is the victim of what Kallos called an “accident of history” in his official testimony, meaning the nine-block area is the only  residential area of the city zoned R10 without a tower-on-a-base standard or any type of contextual protection. 

“The Sutton area is uniquely vulnerable to the development of super tall towers, a building form that was neither contemplated nor feasible when the R10 district was created in 1961,” Kallos said in his official testimony. “By implementing tower-on-a-base zoning, we would prevent the construction of super-skinny buildings that get to heights of 1,000 feet, by requiring new buildings to pack roughly half of the building into a  base under 150 feet, leaving limited [floor area ratio] for a tower, thus restricting its height.”


Source: commercial