When the Metropolitan Transportation Authority finalized its construction plans for the Fulton Center, the result will be a downtown commuter’s dream. But to get there, the MTA had to use eminent domain to take over and demolish 194-196 Broadway, a building owned by DLR Properties, in 2006. The agency valued the building, which housed a host of fast-food tenants, at $27.4 million. The attorneys at Rosenberg & Estis disagreed, claiming the building was valued at nearly $60 million. The firm represented DLR Properties in three separate rulings and eventually helped its client score as many victories: The food-service tenants in the building can recover $15 million in damages for the value of trade fixtures lost, the MTA must pay $35.2 million for undervaluing the property, and the agency must also pay the legal fees and expenses for DLR. Rosenberg and Estis founding partner Warren Estis revealed how he helped DLR Properties get its true value from eminent domain.
The Commercial Observer: When were you first approached by The Riese Organization [the parent fee owner of 194 Broadway]?
Mr. Estis: I’ve been representing the Riese family going back since 1980, when the Riese brothers, Irving and Murray Riese, ran the organization, and had a wonderful, and still have a wonderful, relationship with them.
How did they categorize their problems with the MTA at the time?
He [current CEO Dennis Riese] was trying to protect his property interests at a location that’s been in the Riese family for many, many years. If it was going to be taken, he wanted to make sure he was properly compensated for the property.
What was your initial argument in court?
I think we were verifying that it was appropriate and … it became an issue of compensation for the fee owner and also the tenants [KFC, TGI Friday’s, Pizza Hut and Dunkin’ Donuts, all affiliates of The Riese Organization] that were occupying the premises.